Inland real estate industry holds its breath as FHA crunches numbers for new loan ceiling
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California, fannie mae, FHA, freddie mac, loan limits February 25th, 2008Homeowners and buyers in Inland Southern California will learn next month if they will benefit from new federal guidelines designed to spur house sales and to help people refinance to avert foreclosure.
Ironically, this area’s fast-falling median home prices could work against the value of the bailout effort long sought by the mortgage and real estate industries.
The Federal Housing Administration says it will publish new ceilings for the Fannie Mae and Freddie Mac mortgages it insures in mid-March. Its current cap on loans is $417,000. The elevated ceilings, which are to remain in effect for one year, will vary across the nation, based on each area’s median home price.
For five years, housing industry groups argued that the loan ceilings for such mortgages were too low in markets with skyrocketing home prices such as the Inland area. Then, home values tumbled.
Now that private mortgage investors have fled, scared by rising defaults and foreclosures, legislation enacted earlier this month will permit Fannie Mae and Freddie Mac, both government-sponsored purchasers of mortgages, and FHA to play a bigger role.
Tags: California, fannie mae, FHA, freddie mac, loan limits
