This past Tuesday the Office of Federal Housing Enterprise Oversight (OFHEO) announced that it will keep conforming loan limits at the current level of $417,000 for single-family mortgages in 2008. The conforming loan limit determines the maximum size of a mortgage that Fannie Mae and Freddie Mac can buy or guarantee. Non-conforming or jumbo loans typically carry a higher mortgage interest rate than a conforming loan. This announcement is a huge blow to us locally since the median price of a home in California is more than 2.5 times that of the U.S. median price of $221,000.
Now is the time for citizens to contact their legislators and demand that the U.S. Senate pass legislation allowing regional adjustments to Fannie Mae and Freddie Mac and to modernize the FHA loan programs. Even despite falling home prices in many regions in the state, California still remains the nation's least affordable market for homeowners. During the third quarter of 2007, nine of the nation's 10 least-affordable communities were located in California.
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