Kendall Realty Advisors Loan Program

Wednesday, May 11, 2011

Federal - FNMA FHA Freddie Mac Drop in loan limit May Hurt Upscale Housing


Bad News for Upscale For Sale Developers - Good News High End Apartment Owners
New Home Loan Limits for FNMA FHA Freddie Mac http://nyti.ms/kkKGEr
The average loan limit will fall about 15 percent, to a maximum $625,500, in area's of high median income, but not back to the lower 2008 level.
Test for private mortgage lenders , result may be larger down payments, higher credit scores
Old about 20 percent down payment on a new home new (30%?)
If a bigger deposit were required,  more renters

With the Government take over of FNMA and Freddie Mac and the decision to wind them down over ten years housing finance costs will go up much more for those over the limits.  Insured loans will see a small increase mortgage insurance premiums, Jumbo loan borrowers will have to pay the going spread for private loan pools and face strict private lender requirements. This could raise interest rates one or more percent on Jumbo loans even with the higher down payments and credit scores.


The government will no longer insure over the new limit mortgages and the historic effective interest rate savings for government or agency insurance has been estimated at about one percent during normal lending times.


The housing finance system of the future will cost more for borrowers, but the government will still provide home loan mortgage insurance for the majority of home owners in moderately priced homes.

Chicago Apartment Commercial Mortgage

Updated Posts September 2011

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