Conforming Loan Limit to Drop

Extract – HousingWire.com

“To support a crippled mortgage-finance market in 2008, Congress increased the conforming loan limit for Fannie Mae, Freddie Mac, and Federal Housing Administration loans to a local cap of 125% of median home prices along with the overall ceiling of $729,000 in the most expensive neighborhoods.

On Oct. 1, those limits dropped to 115% of local medians despite a major push from the industry and several lawmakers in the Senate and the House of Representatives.”

In Nassau County alone, there are 18 zip codes that have a median sales price greater than $725,000 which could be affected by this change in policy. As a result, loans made at this new level will not be eligible for Fannie Mae/Freddie Mac financing and will need to be held by the secondary market which includes portfolio lenders.