New Conforming Loan Limits

And the magic number is....$697,500!

In a move that could help thousands of distressed San Diego homeowners, the Federal Housing Administration announced that it will raise the limits on mortgages it guarantees from $417,000 to $697,500 within the county.

Mortgage-purchasing giants Fannie Mae and Freddie Mac are likely to soon adopt the same new limits as the FHA. If so, that will greatly ease the national credit crunch for borrowers who need to refinance adjustable-rate mortgages or risk losing their homes to foreclosure.

Government-sponsored Fannie Mae's and Freddie Mac's limit for “conforming” loans is $417,000. Loans below that limit have carried lower interest rates and better terms than larger “jumbo” loans.

Something to rememember: it may not last forever! While the stimulus act will raise lending limits for Fannie Mae, Freddie Mac and the FHA, all of the new limits are scheduled to expire at the end of the year.

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