Fannie and Freddie’s Jumbo Loans Limited to 19 Housing Markets
From Homescape
written by Amy Le on Wednesday, February 13, 11:55AM
“The devil, as they say, will be in the details. The new formula for determining the conforming loan limit will only allow Fannie, Freddie and FHA to guarantee loans of up to 125 percent of the median home price of an area,” Inman News reports. As a result, the $417,000 conforming loan limits will remain in place in markets where the median home price is $333,600 or less, which in affect will have minimal impact on the overall housing market. But proponents of the plan say authorizing Fannie and Freddie to purchase or guarantee increased loan limits in states like California and Washington, D.C., — which have significantly larger housing markets — will benefit greatly.
The Stanford Group Co., which follows the secondary mortgage market, recently released a report using median-home price data from the National Association of Realtors to analyze which housing markets Fannie and Freddie might be able to purchase or guarantee loans above the current $417,000 limit. The Stanford Group identified 19 markets — more than a third of them in California — where the plan will be applicable. About 141 metro areas in the United States with lower median home prices will not see loan limits go up under the plan’s current formula.
Estimated conforming loan limit increases
| Metropolitan area | Median price 3rd qtr. 2007 | Estimated new limit |
| Anaheim-Santa Ana, Calif. | $700,700 | $729,750 |
| L.A.-Long Beach-Santa Ana, Calif. | $588,400 | $729,750 |
| San Diego-Carlsbad-San Marcos, Calif. | $589,300 | $729,750 |
| San Francisco-Oakland-Fremont, Calif. | $825,400 | $729,750 |
| San Jose-Sunnyvale-Santa Clara, Calif. | $852,500 | $729,750 |
| Riverside-San Bernardino-Ontario, Calif. | $377,000 | $471,250 |
| Sacramento-Arden-Arcade-Roseville, Calif. | $335,700 | $419,625 |
| Barnstable Town, Mass. | $400,600 | $500,750 |
| Boston-Cambridge-Quincy, Mass. | $414,700 | $518,375 |
| Boulder, Colo. | $367,500 | $459,375 |
| Bridgeport-Stamford-Norwalk, Conn. | $491,100 | $613,875 |
| Miami-Fort Lauderdale-Miami Beach, Fla. | $346,800 | $433,500 |
| New York-Northern N.J.-Long Island, N.Y./N.J. | $476,100 | $595,125 |
| New York-Wayne-White Plains, N.Y. | $550,900 | $688,625 |
| Edison, N.J. | $391,800 | $489,750 |
| Nassau-Suffolk, N.Y. | $470,000 | $587,500 |
| Newark-Union, N.J./Penn. | $459,700 | $574,625 |
| Seattle-Tacoma-Bellevue, Wash. | $394,700 | $493,375 |
| Wash. D.C.-Arlington-Alexandria, Va./Md./W.V. | $438,000 | $547,500 |
Source: National Association of Realtors, Stanford Group
Got hot local housing tips or a story you want to share? Contact Amy Le at openingdoorsblog@homescape.com.
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