Congress passed a congressional resolution late yesterday that should help those with poor credit get mortgages in more expensive areas of the country like California. A provision of the Housing and Economic Recovery Act of 2008 included temporarily raising the conforming loan limits from $625,500 in high-cost areas to $729,750 through 2009. Yesterday’s actions effectively extend the higher conforming loan limits for Fannie, Freddie, and FHA loans through 2010.
Naturally, Realtors’ organizations say that the action was needed to allow the housing market to continue its recovery. But, unlike their predictions about the 2007 housing market (remember all those “It’s a Great Time to Buy!” advertisements?) they are probably right this time. “There is no doubt that higher loan limits and the federal tax credit for first-time home buyers have helped stabilize California’s housing market over the last year,” said California Association of Realtors President James Liptak.
Higher FHA loan limits mean greater access to funding for those challenged by the lack of a large down payment, non-traditional credit or poor credit, or moderate income. So, Dude, put the surf board away for a minute, find the FHA loan limits in your area, then compare lenders and get your best deal on a new home. Californians aren’t going to find better opportunities for home ownership any time soon.
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