Fannie Mae and FHA Conforming Loan Limits Dropping. Close by 9/30/2011 or sooner!
A guest post by David Gaffin, Senior Mortgage Lender, from Greenpark Mortgage.
David Gaffin, Greenpark Mortgage
As Congress lets the temporary increase in conforming loan limits expire October 1st, we have received word that some investors will require that all loans affected by these limits close on or before September 30, 2011. Other investors will have their own timelines and will require closings earlier, perhaps weeks earlier.
I have attached a chart below indicating the new loan limits for 1-4 family residences through 12/31/2011 for some investors. 2012 Loan limits for Fannie and Freddie have yet to be announced. For Massachusetts this reduction will impact the these areas as follows: Martha’s Vineyard and Nantucket: Reduced from $729,750 to $625,500; , Essex, Middlesex, Norfolk, Plymouth and Suffolk Counties reduced from $523,750 to $465,750; Bristol county will be reduced to $426,650; Franklin, Hampden, Hampshire and Worcester Counties will remain at $417,000.
Please follow the attached chart for the max loan amounts. It is indicated by county.
1 Family 2 Family 3 Family 4 Family
| BRISTOL | MA |
$426,650 |
$546,200 |
$660,200 |
$820,500 |
| DUKES |
MA |
$625,500 |
$800,775 |
$967,950 |
$1,202,925 |
| ESSEX |
MA |
$465,750 |
$596,250 |
$720,700 |
$895,700 |
| FRANKLIN |
MA |
$417,000 |
$533,850 |
$645,300 |
$801,950 |
| HAMPDEN |
MA |
$417,000 |
$533,850 |
$645,300 |
$801,950 |
| HAMPSHIRE |
MA |
$417,000 |
$533,850 |
$645,300 |
$801,950 |
| MIDDLESEX |
MA |
$465,750 |
$596,250 |
$720,700 |
$895,700 |
| NANTUCKET |
MA |
$625,500 |
$800,775 |
$967,950 |
$1,202,925 |
| NORFOLK |
MA |
$465,750 |
$596,250 |
$720,700 |
$895,700 |
| PLYMOUTH |
MA |
$465,750 |
$596,250 |
$720,700 |
$895,700 |
| SUFFOLK |
MA |
$465,750 |
$596,250 |
$720,700 |
$895,700 |
| WORCESTER |
MA |
$417,000 |
$533,850 |
$645,300 |
$801,950 |
You can also access other states via the website: http://www.fhfa.gov/Default.aspx?Page=185 and click on the HERA Loan Limits at the bottom of the page.
With respect to FHA, more pain is ahead as FHA seeks to lower its market share and reduce exposure. Loan limits decreases will affect Massachusetts dramaticaly, as the chart below indicates:
| Continuing | HERA | Median | ||||
| Appropriations | Limit | House | Year | |||
| Act | of | Price | of Median | |||
| Limit 2011 | 2011 | for | House | |||
| (1-unit) | (1-unit) | Difference | Area | Price | ||
| MA | BarnstableCounty |
$462,500 |
$405,950 |
($56,550) |
$353,000 |
2008 |
| MA | BristolCounty |
$475,000 |
$426,650 |
($48,350) |
$371,000 |
2008 |
| MA | DukesCounty |
$729,750 |
$625,500 |
($104,250) |
$626,000 |
2010 |
| MA | EssexCounty |
$523,750 |
$465,750 |
($58,000) |
$405,000 |
2008 |
| MA | FranklinCounty |
$318,750 |
$274,850 |
($43,900) |
$239,000 |
2010 |
| MA | HampdemCounty |
$318,750 |
$274,850 |
($43,900) |
$239,000 |
2010 |
| MA | HampshireCounty |
$318,750 |
$274,850 |
($43,900) |
$239,000 |
2010 |
| MA | MiddlesexCounty |
$523,750 |
$465,750 |
($58,000) |
$405,000 |
2008 |
| MA | NantucketCounty |
$729,750 |
$625,500 |
($104,250) |
$1,325,000 |
2009 |
| MA | NorfolkCounty |
$523,750 |
$465,750 |
($58,000) |
$405,000 |
2008 |
| MA | PlymouthCounty |
$523,750 |
$465,750 |
($58,000) |
$405,000 |
2008 |
| MA | SuffolkCounty |
$523,750 |
$465,750 |
($58,000) |
$405,000 |
2008 |
| MA | WorcesterCounty |
$385,000 |
$285,200 |
($99,800) |
$248,000 |
2008 |
Worcester County will get killed! With Loan Limits dropping by almost $100,000, FHA will be effectively increasing the down payment requirements for buyers, if they wish to purchase a home over $298,000. This will have an impact on home prices. FHA is also good for buyers who have less than 740 credit scores. Fannie has price adjustments for lower Ficos and these raise the interest rates to borrowers. The towns of Milford, Westborough, Northborough, Shrewbury, Northborough, among others could be hard hit.
Bottom line, Take advantage of the low interest rates and higher loan limits now. Greenpark is currently accepting purchase loans for the higher limits until 8/25/2011, to close by 9/30/2011.
Please send me an email me, [email protected] with any questions and thank you for reading.
