Jumbo mortgages harder to get as higher U.S. loan limits expire
By: Dawn Kopecki
Bloomberg News
October 29, 2009
U.S. borrowers are finding it more difficult to lock in interest rates on some so-called jumbo mortgages as Fannie Mae and Freddie Mac's maximum loan amounts are set to decline Jan. 1, housing groups told Congress.
The companies' so-called conforming loan limits, which restrict the size of the mortgages they can buy, will roll back from a temporary increase of $729,750 to $625,500 in many markets if Congress doesn't permanently raise the limits.
"The higher limits are a key component of the economic recovery efforts because they help make affordable loans available for a mortgage," according to a letter sent to House and Senate leaders today by the Mortgage Bankers Association, National Association of Realtors and National Association of Home Builders. "Even though the temporary limits do not expire until the end of this year, obtaining financing is already becoming more difficult and expensive for many borrowers."
The companies' loan limits are $417,000 in most of the country and as high as $729,750 in the roughly 90 most-expensive real estate markets including the in greater Washington metro area.
