Revised Fannie, Freddie Loan Limits Will Benefit Homebuyers, but Don't Go Far Enough to Improve Homeownership Opportunities in California.LOS ANGELES Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. -- More than 28,590 families in California will be able to benefit from Fannie Mae's and Freddie Mac's announcements today that each will increase its single-family mortgage loan limit from $359,650 to $417,000 in 2006, according to according to prep. 1. As stated or indicated by; on the authority of: according to historians. 2. In keeping with: according to instructions. 3. an analysis by the California Association of REALTORS(R) (C.A.R.). "While this is good news for many homebuyers, Fannie Mae's and Freddie Mac's new loan limits do not go far enough to benefit most homebuyers in California," said C.A.R. President Vince Malta. "Conforming loan Conforming Loan A conventional mortgage under $203,150 that conforms to the loan amounts and mortgage guidelines used by Fannie Mae and/or Freddie Mac. Notes: Conventional mortgages or conforming loans are classified as non-conforming or jumbo loans when the amount of the limits need to more accurately reflect the cost of housing in California, where the median price of a home is more than double that of the nation." The current median home price in California is $538,770, an increase of 17.2 percent compared to a year ago and more than 29 percent higher than the national conforming loan limit of $417,000. In addition, California has 19 counties with a median-home price above the national conforming loan limit. Based on its 2006 sales projection, C.A.R. expects that 304,700 sales in the state will fall into the price range implied by the higher loan limits, an increase of 72,070 homes over the 2005 loan limits. The $57,350 increase in the single-family mortgage loan limit translates into an additional 28,590 households able to take advantage of savings provided by having a Fannie Mae Fannie Mae: see Federal National Mortgage Association. or Freddie Mac Freddie Mac: see Federal Home Loan Mortgage Corporation. qualifying mortgage. Regionally, an additional 7,340 households in the San Francisco Bay Area “Bay Area” redirects here. For other uses, see Bay Area (disambiguation). The San Francisco Bay Area, colloquially known as the Bay Area or The Bay and 12,510 households in the five-county Southern California Southern California, also colloquially known as SoCal, is the southern portion of the U.S. state of California. Centered on the cities of Los Angeles and San Diego, Southern California is home to nearly 24 million people and is the nation's second most populated region, region will be able to benefit from the increased loan limits, according to C.A.R. economists. The C.A.R. statistics do not include refinance activity. Based on a typical 25 basis point spread between conforming and jumbo mortgage loan rates, a typical California homebuyer will save up to $24,710 over the life of a 30-year mortgage. In some areas of the state, the recent spread between a conforming and jumbo loan Jumbo Loan Any residential or commercial mortgage with a loan amount exceeding the guidelines of Fannie Mae and Freddie Mac. Notes: Rates tend to be slightly higher on jumbo loans because lenders generally have a higher risk. has been as much as 40 basis points. Households in these areas could save up to $39,660 over the life of a 30-year mortgage. Fannie Mae and Freddie Mac also announced new limits for multi-unit loans for 2006: two-family loans to $533,850; three-family loans to $645,300; and four-family loans to $801,950. The California Association of REALTORS(R) (http://www.car.org) is one of the largest state trade organizations in the United States, with more than 180,000 members dedicated to the advancement of professionalism in real estate. C.A.R. is headquartered in Los Angeles. Today's release also is available on C.A.R. Online at http://www.car.org/index.php?id=MzU2NjQ=. |
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