The rumors have been confirmed -- the conforming loan limit for the remainder of 2008 will be the same as the FHA mortgage limit for the Seattle/Bellevue/Everett Metropolitan Statistical Area: $567,500.
So now what?
Now we wait for lenders and FHA, Fannie Mae and Freddie Mac to prepare to begin accepting these loans. The estimate is April 1st for Fixed Rate loans such as the 30-year fixed and the 15-year fixed, and May 1st for ARMs such as the 3/1, 5/1, and 7/1 ARMs.
As a sidenote, they have announced more stringent guidelines for these higher loan amounts. I imagine things will continue to be adjusted but they've announced a maximum 45% debt-to-income (DTI) ratio, and a maximum Loan-To-Value (LTV) and Combined Loan-To-Value (CLTV) percentages of 90% on purchases for a Fixed Rate loan; and 80% for purchases on ARMs. The maximum LTV/CLTV for a second home or investment property is 60%.
Sounds more like guidelines from 20 years ago! Of course, the loan amounts are a tad higher...
At this point it's still somewhat unclear what the adjustments to the interest rate will be for these "Jumbo-Conforming" loans, other than there will be adjustments -- both by Fannie Mae, and most likely by the lender as well. Stay tuned...
And as always, thanks for reading! --James
Friday, March 7, 2008
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