SOME HOME BUYERS MAY BENEFIT FROM NEW LOAN LIMITS.

Byline: GREGORY J. WILCOX

Some prospective home buyers in California - more than 28,590, to be somewhat exact - saw their outlook brighten last week. A lot more than that didn't.

Mortgage giants Fannie Mae and Freddie Mac, in what's an annual Christmas season tradition, boosted their loan limits for the coming year.

And in another holiday tradition, the California Association of Realtors and others lamented that this is not much help at all for most people trying to buy a home here.

Help and hope are on the way, though, for folks living in hot housing markets of Alaska, Hawaii, Guam and the U.S. Virgin Islands. Their loan limit is 50 percent higher than those for the rest of the country.

They can thank an alphabetical quagmire for this largess along with some astute pork-barreling a few years ago.

The loan limits are based on the October-to-October changes in average home prices. The limits for next year are:

--$417,000 for mortgages on one-family properties, up from $359,650 this year.

--$533,850 for mortgages on duplexes, up from $460,400.

--$645,300 for mortgages on triplexes, up from $556,500.

--$801,950 for mortgages on fourplexes, up from $691,600.

Freddie and Fannie are just doing what they are told.

The Office of Federal Housing Enterprise Oversight sets the limits based on the Monthly Interest Rate Survey conducted by the Federal Housing Finance Board.

The folks at those agencies are just doing what Congress tells them.

Officials at OFHEO could not provide a comparison of average prices from state to state and state to territory, though.

Nor did they want to engage in a discussion of why states with big population centers and high-priced homes, like California, are getting shorted on the limits.

``We're not going to comment on that. We're the regulatory agency,'' said agency spokeswoman Corrinne Russell when asked if this was a fair way of doing business.

She didn't want anything else about our conversation on the record.

One high-ranking executive didn't want to be on the record either. But here is his paraphrased response to that question: The loan limit is probably fair, depending on where you live. If that somewhere is California, it's probably not fair.

Every year, Rep. Brad Sherman, D-Sherman Oaks, tries to get the formula changed and the lack of success won't diminish that effort.

This year, he partnered with Rep. Gary Miller, R-Brea, to introduce an amendment to HR 1461, sponsored by Richard Baker, R-La. That legislation was introduced in response to accounting problems at the two mortgage giants.

The amendment would basically raise the conforming loan limit to either the median price for a metro area or 150 percent of what the limit is, whichever is lower.

That would be good news for an area like Los Angeles County, which had a home median price - halfway between the most and least expensive homes - of $557,730 in October. In the San Fernando Valley, it was $600,000.

It's important since conforming loans issued by lenders have lower interest rates, and lower monthly payments, than the kind of loans used to buy properties priced above the limit.

Sherman and Miller have already faced down some opposition. An amendment to strip their amendment from HR 1461 was soundly defeated by a vote on the House floor.

More trouble looms in the Senate, where the bill is now. Sherman notes that opposition comes from some big lenders who make jumbo loans, which are more profitable than conventional loans because of higher interest rates.

``This is a step in the right direction, but many more middle-class homeowners in Southern California and other high-priced housing markets deserve a fairer shake,'' Sherman said about the new limits.

The Senate might act on the bill next year. Sherman likes his chances this time around.

``Someone buying a $450,000 home in the Valley deserves that help just as much as someone buying a $350,000 home in Boise,'' he said.

The state association took a similar position.

Association president Vince Malta said the conforming loan limits need to more accurately reflect the cost of housing here since the statewide median price is more than double the national average.

``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,'' he said.

The association estimates that 7,340 more households in the San Francisco Bay Area and 12,510 more households in the five-county Southern California region will be able to benefit from the increased loan limits versus a year ago.

A lot more than that are likely in pursuit of the American dream.

And they've got to wait at least one more year for help and hope to come their way.

Gregory J. Wilcox, [phone]

greg.wilcox(at)dailynews.com