The mortgage industry has not been able to take a breath these passed two months. With the November jobs report being released and loan limits being raised, it’s no surprise the Federal Open Market Committee meeting is so eagerly awaited.
Loan limits to increase
If you have not considered buying a home specifically because of current loan limits, it would be a good time to start “house hunting”. As of recently, loan limits have found themselves in the news, and as realtors and potential home buyers would agree, it’s for a very exciting reason.
Home prices have exceeded all-time highs and it seems there is a solution to keep up with these rising prices. The Federal Housing Finance Agency (FHFA) has decided to raise the maximum national conforming loan limit in 2017 for mortgages developed by Fannie Mae and Freddie Mac. Going back in time, the Housing and Economic Recovery Act of 2008 (HERA) set the baseline loan limit to be $417,000 for single-family homes and has not been increased since 2006. Increasing to $424,100, the new maximum loan limit will be in effect for most counties throughout the country. To be exact, 87 counties or county-equivalents in the U.S. will not experience the maximum loan limit increase. In high-cost areas, the U.S. Department of Housing and Urban Development (HUD) will raise the loan limit “ceiling” to $636,150 from $625,500. Mirroring this increase, the “floor” will rise to $275,665 from $271,050.
Desktop Underwriter will recognize the new loan limits on December 10th for new applications and will apply to all closing loans on January 1st.
As we are just one day away from the December 13 – 14 Federal Open Market Committee meeting, it’s becoming very clear that we will, in fact, see a rate hike this month. This will be the final policy meeting of the year. Be sure to stay tuned shortly after the Fed meeting to hear Fed Chair Janet Yellen hold a press conference, this will surly be a highlight of the meeting.