Fannie Mae and Freddie Mac Conforming Loan Limit to Remain at $417,000 for 2008.

The Office of Federal Housing Enterprise Oversight (OFHEO) announced today that the maximum 2008 Conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac will remain at the 2007 level of $417,000 for one-unit properties. Higher limits will continue to apply for Alaska, Hawaii, Guam and the U.S. Virgin Islands, as well as for properties with more than one unit.

The Conforming Loan limit determines the maximum size of a mortgage that Fannie and Freddie can purchase. By law, the limit is based on the October-to-October change in the average house price in the Monthly Interest Rate Survey of the Federal Housing Finance Board. While the average house price in the survey declined by 3.49% over the last year, the OFHEO once again has chosen to follow the proposed new conforming loan limit guidance procedures and keep the limit at $417,000.

Since the OFHEO assumed responsibility for establishing the conforming loan limit in 2004, they have adjusted the guidance procedures through open comment periods and after their last one in June of this year, announced that no decreases in the loan limit would be required for 2008, regardless of the price data in the MIRS report.

We applaud their decision, as the mortgage and housing markets are facing enough problems under the circumstances and lowering the Conforming Loan amount would have served no purpose other than to make the current situation even worse.

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