Increased FHA Loan Amounts through 2008 Means Increased Opportunity for You

Effective March 6, 2008, HUD will offer temporary FHA loan limits that will range from $271,050 to $729,750 (Limits). Overall, the change in loan limits will help provide economic stability to America's communities and give nearly 240,000 additional homeowners and homebuyers a safer, more affordable mortgage alternative. The maximum amount of $729,750 will only be applicable to extremely high-cost metropolitan areas. Previously, FHA's loan limits in these very high-cost areas were capped at $362,790.

The Economic Stimulus Act of 2008 permits FHA to insure loans on amounts up to 125 percent of the area median house price, when that amount is between the national minimum ($271,050) and maximum ($729,750). The new minimum and maximum loan limits are based on 65 percent and 175 percent of the conforming loan limits for Government-Sponsored Enterprises in 2008, which is $417,000. The change in loan limits are applicable to all FHA-insured mortgage loans endorsed with HUD’s publication of the increased loan limits on March 6, 2008, and it lasts until December 31, 2008.

By increasing loan limits nationwide, FHA will provide much needed liquidity and stability to housing markets across the country. Already, as conventional sources of mortgage credit have been contracting, FHA has been filling the void. From September to December 2007, FHA facilitated more than $38 billion of much-needed mortgage activity in the housing market, more than $15 billion of which was through FHASecure, FHA's refinancing product. By focusing on 30-year fixed rate mortgages, FHA helps homeowners avoid and escape the risks associated with exotic subprime mortgage products, which have resulted in rising default and foreclosure rates.

FHA Mortgage Limits
9/17/8 <http://www.hud.gov/offices/hsg/sfh/lender/sfhmolin.cfm>.

Fannie, Freddie and why it could be lower rates for You

Rates on the popular 30-year fixed mortgage dropped sharply recently, falling to the lowest level in five months. The rapid reduction of rates can be attributed to the government's bailout of mortgage giants Fannie Mae and Freddie Mac. The sharp decline pushed the 30-year rate to its lowest level since May of this year.

The government bailout has worked to ease uncertainty about Fannie and Freddie which own or guarantee half of the nation's mortgages. Rates have also trended downward for 15-year and 5-year mortgages as well.

After bailout, mortgage rates hit five-month low
9/17/8 <http://www.msnbc.msn.com/id/7148582/>

CONTACT:   Robert Egeland (630-368-9177) - Chuck Silver (630.368.9177)