California REALTORS® welcomed the Federal Housing Finance Agency's (FHFA) recent announcement that it would keep the maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac unchanged in 2015 for most of the country. The FHFA, however, raised the conforming loan limit in 46 counties, including four California counties, because those counties experienced increases in local home values.
"C.A.R. applauds the FHFA for retaining the existing Fannie Mae and Freddie Mac conforming loan limits, and even raising the limit in some California counties," said California Association of REALTORS® 2015 President Chris Kutzkey. "The FHFA recognizes that home prices have risen significantly in California, especially in high-cost coastal areas, where lowering the loan limits would have hurt the housing recovery."
The conforming loan limit determines the maximum size of a mortgage that government-sponsored enterprises Fannie Mae and Freddie Mac can buy or "guarantee." Non-conforming or "jumbo loans" typically have tighter underwriting standards and carry higher mortgage interest rates than conforming loans, increasing monthly payments and hampering the ability of families in California to purchase homes by making them less affordable
For 2015, the maximum limit for mortgages acquired by Fannie Mae and Freddie Mac will stay at $417,000 for single-unit properties in most of the country. The maximum conforming loan limit of $625,500 for certain high-cost areas, including the counties of San Mateo and Santa Clara and much of the Bay Area, will also remain unchanged.
"REALTORS® at the local, state and national levels have long advocated for making higher conforming loan limits permanent. As a result of their efforts, Congress made permanent the maximum conforming loan limits at $625,500," said David Tonna, president of the Silicon Valley Association of REALTORS®.
The FHFA raised the conforming loan limits in Monterey, Napa, Ventura and San Diego counties in California. Monterey County's conforming loan limit will increase to $502,550, up from $483,000; San Diego County, to $562,350, up from $546,250; Ventura County, to $603,750, up from $598,000; and Napa County, the conforming loan limit will rise to $615,250, up from $592,250. Other high-cost areas that will see conforming loan limit increases are the Denver, Colorado metro area; the Boston, Massachusetts metro area; the Baltimore, Maryland metro area; the Nashville, Tennessee metro area and the Seattle, Washington area.
The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 and are recalculated and set each year. Calculations are based on median home values. A full list of counties with higher limits, along with the agency's list of loan limits for all counties nationwide, can be found at FHFA's website, may be found at www.fhfa.gov.
The Silicon Valley Association of REALTORS® (SILVAR) is a professional trade organization representing over 4,000 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula and in the South Bay. SILVAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in Silicon Valley.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
Variations of this article have appeared in local area newspapers.
For further information, please email or call the SILVAR office at (408) 200-0100.