Proposal To Raise Conforming Loan Amount

Posted Jan 28, 2008 @ 8:34 pm, Viewed by 618 Visitors, Read 639 Times.

As part of the Economic Stimulus Package being considered by the administration and by Congress, there is a proposal that would be a great boon to the housing market in the Washington, D.C. area – that is the increase in the conforming loan amount. Depending on what you read, this amount (which is currently capped at $417,000) could temporarily increase to $625,000…or even more. 

My understanding is that the temporary increase would be different for different parts of the country. Where housing prices are more expensive, the loan limit would be allowed to go higher than where housing prices are less. This makes great sense and, even if the increase is only temporary, it seems that” the powers that be” should give consideration to the fact that housing prices in our country vary tremendously. In some locales, the $417,000 limit makes sense and leaves only the very wealthy having to deal with a “jumbo” loan. But, for real estate in areas like Bethesda, or Chevy Chase, or Potomac or many areas of Washington, D.C., a conforming loan just doesn’t do the trick and one of the fallouts of the subprime crisis is the increase in jumbo rates. Currently, in our market, there is a one point difference between conforming and jumbo rates – and that adds up quickly over the years of a mortgage.
 
An increase in the conforming loan amount would be extremely helpful to Washington area home buyers. A recognition by our government that the cost of housing in our country varies dramatically and that this should translate into varying loan programs is also extremely important. Even if the former is a temporary fix, the latter may just be the beginning of government programs that benefit buyers in more expensive markets.

- Contributing blogger Gretchen Koitz

 Montgomery County Maryland real estate | Chevy Chase Real Estate | Washington DC real estate                                                                                              

The Gretchen Koitz Group | serving the Washington DC Metropolitan area including Washington DC, Montgomery County Maryland, & Northern Virginia

 

 

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1 Responses to “Proposal To Raise Conforming Loan Amount”

photo dlwest35

I think if this happens all around the country we will see more money come into the market in a big way.

Posted 1 year ago
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The Koitz Group

The Koitz Group The Koitz Group at Long and Foster is a multi-generational group of highly experienced agents. Its principal, Gretchen Koitz has over 20 years of full-time residential real estate experience and shares her expertise as director of new agent training at the Bethesda Gateway Office, where for each of the past five years the productive level of the office has exceeded $1 Billion! Read More

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