Government sets new loan limits
That's the new, temporary limit for Baltimore-area borrowers getting loans insured by the Federal Housing Administration or mortgages that will be sold to financiers Fannie Mae and Freddie Mac.
It's part of an increase in higher-price communities nationwide, an effort by the federal government to inject more life into the housing market and help people with larger loans who are having trouble refinancing. People borrowing above the Fannie and Freddie limits have to pay higher interest rates for such "jumbo" mortgages.
The $560,000 limit applies to the Baltimore metro area as a whole -- meaning, by the federal government's definition, Baltimore City, Anne Arundel County, Baltimore County, Carroll County, Harford County, Howard County and Queen Anne's County. Click HERE to see the Fannie/Freddie list and HERE for the FHA list.
For FHA-insured loans, that's an especially big increase -- up from $362,790. Fannie and Freddie's limit had been $417,000.
Coldwell Banker Residential Brokerage in Greater Baltimore, which ran some numbers today, says these limits could affect as many as 18 percent of the homes on the market around here. That's assuming buyers would be making a down payment of 20 percent.
The temporary limit is a lot higher than I expected. It's supposed to be 25 percent more than the median house price for the highest-priced county in the metro area. That's Howard County hereabouts, and the median price there last year was $390,000, according to Metropolitan Regional Information Systems. (Twenty-five percent more than that is just under $490,000.)
Clearly the government is using other figures -- perhaps ones that cut out condos and other (generally) cheaper housing types.
These temporary loan limits are set to expire at the end of the year.
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