Conforming loan limits extended for Californians
High limit means less hassle, interest on larger home mortgages
Two large Realtor organizations have praised Congress for passing a continuing resolution that included a provision extending through fiscal year 2011 the current conforming loan limit of $729,750 for high-cost areas, including many locations in California.
The same limits will also be extended to loans insured by the Federal Housing Administration.
The California Association of Realtors (CAR) and the National Association of Realtors (NAR) have long advocated making permanent higher conforming loan limits.
As a result of these efforts, a provision of the Housing and Economic Recovery Act of 2008 included temporarily raising the conforming loan limits from $417,000 to $729,750 in high-cost areas and extending the limits through 2009.
The recent action by Congress effectively extends the higher conforming loan limits for Fannie, Freddie, and FHA loans through Sept. 30, 2011. They were set to expire at year's end.
"CAR applauds our congressional representatives for their actions to extend the higher loan limits through 2011," said CAR President Steve Goddard. "Without the extension of the higher loan limits, many California borrowers would have a harder time refinancing homes and obtaining financing for new home purchases,"
The conforming loan limit determines the maximum size of a mortgage that government sponsored enterprises Fannie Mae and Freddie Mac can buy or "guarantee." Non-conforming or "jumbo loans" typically carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable.