High-cost mortgages just got cheaper
Freddie and Fannie can now purchase loans worth as much as $793,000, while the FHA can insure loans for up to $729,000.
30 yr fixed | 3.80% |
15 yr fixed | 3.20% |
5/1 ARM | 3.84% |
30 yr refi | 3.82% |
15 yr refi | 3.20% |
NEW YORK (CNNMoney.com) -- Mortgage costs just got cheaper for buyers in high-cost areas.
The size of loans that can be guaranteed by Freddie Mac and Fannie Mae was raised today by the Office of Federal Housing Enterprise Oversight. The new, higher loan limits will stay in effect through the end of the year, allowing the government sponsored enterprises (GSEs), to buy much higher-priced mortgages in some areas of the country.
Also today, the size of the loans that the Federal Housing Authority (FHA) can insure was raised by Housing and Urban Development (HUD).
Both moves will lower borrowing costs for buyers of higher priced homes, and aim to boost flagging real estate markets.
Previously, Fannie and Freddie could only insure mortgages of up to $417,000, called conforming loans. That meant, assuming a 20% down payment, that only buyers of homes costing $521,500 or less were eligible for mortgages with GSE backing.
The new loan limits for Fannie and Freddie vary by area based on local median home prices and go as high as $793,750 in Honolulu. (For details, see table below).
Loan limits for FHA-insured loans were even lower; no more than $362,790. Now mortgages of up to $729,750 will qualify for FHA insurance.
The problem was that there are whole swaths of the nation where the typical home cost far more than that, and non-conforming or "jumbo loans" carry interest rates of about a point higher. For a $500,000 mortgage, that's an additional spending of $330 a month.
In many parts of the country prices are much higher. In San Jose, Calif, the median priced home costs nearly $850,000, according to the latest figures from the National Association of Realtors. In San Francisco, the figure is nearly $780,000; in Anaheim, Calif.; $657,000; in Honolulu $625,000; and in the New York metro area, $525,000. That means more than half the loans in those markets would not qualify under conforming loan limits.
"Families in high-cost states have been priced out of FHA-backed loans," HUD Secretary Alphonso Jackson said earlier today, in a speech before the Las Vegas Association of Realtors. "This has created a vacuum, filled by exotic subprime loans."
During the liquidity squeeze that began during the summer of 2007, jumbo loans became very difficult to find even for well-qualified borrowers. that made it hard to buy homes in certain regions, freezing up real estate markets.
By making it easier for buyers to get loans, regulators hope to get these markets moving again.
The new loan limits affect 71 metropolitan areas, as well as 21 counties outside of those metro areas.
State | Metro Area - County | Limit 1-Unit |
---|---|---|
AZ | Flagstaff (Metropolitan Area) Component County: Coconino |
$450,000 |
CA | Bishop (Micropolitan Area) Component County: Inyo |
$437,500 |
CA | Los Angeles-Long Beach-Santa Ana (Metropolitan Area) Component Counties: Los Angeles, Orange |
$729,750 |
CA | Madera (Metropolitan Area) Component County: Madera |
$425,000 |
CA | Merced (Metropolitan Area) Component County: Merced |
$472,500 |
CA | Modesto (Metropolitan Area) Component County: Stanislaus |
$423,750 |
CA | Napa (Metropolitan Area) Component County: Napa |
$729,750 |
CA | Oxnard-Thousand Oaks-Ventura (Metropolitan Area) Component County: Ventura |
$729,750 |
CA | Phoenix Lake-Cedar Ridge (Micropolitan Area) Component County: Tuolumne |
$437,500 |
CA | Redding (Metropolitan Area) Component County: Shasta |
$423,750 |
CA | Riverside-San Bernardino-Ontario (Metropolitan Area) Component Counties: Riverside, San Bernardino |
$500,000 |
CA | Sacramento--Arden-Arcade--Roseville (Metropolitan Area) Component Counties: El Dorado, Placer, Sacramento, Yolo |
$580,000 |
CA | Salinas (Metropolitan Area) Component County: Monterey |
$729,750 |
CA | San Diego-Carlsbad-San Marcos (Metropolitan Area) Component County: San Diego |
$697,500 |
CA | San Francisco-Oakland-Fremont (Metropolitan Area) Component Counties: Alameda, Contra Costa, Marin, San Francisco, San Mateo |
$729,750 |
CA | San Jose-Sunnyvale-Santa Clara (Metropolitan Area) Component Counties: San Benito, Santa Clara |
$729,750 |
CA | San Luis Obispo-Paso Robles (Metropolitan Area) Component County: San Luis Obispo |
$687,500 |
CA | Santa Barbara-Santa Maria-Goleta (Metropolitan Area) Component Couny: Santa Barbara |
$729,750 |
CA | Santa Cruz-Watsonville (Metropolitan Area) Component County: Santa Cruz |
$729,750 |
CA | Santa Rosa-Petaluma (Metropolitan Area) Component County: Sonoma |
$662,500 |
CA | Stockton (Metropolitan Area) Component County: San Joaquin |
$488,750 |
CA | Truckee-Grass Valley (Micropolitan Area) Component County: Nevada |
$562,500 |
CA | Ukiah (Micropolitan Area) Component County: Mendocino |
$512,500 |
CA | Vallejo-Fairfield (Metropolitan Area) Component County: Solano |
$557,500 |
CA | Yuba City (Metropolitan Area) Component Counties: Sutter, Yuba |
$425,000 |
CA | Alpine County | $547,500 |
CA | Amador County | $443,750 |
CA | Calaveras County | $462,500 |
CA | Mono County | $462,500 |
CO | Boulder (Metropolitan Area) Component County: Boulder |
$460,000 |
CO | Durango (Micropolitan Area) Component County: La Plata |
$443,750 |
CO | Edwards (Micropolitan Area) Component Counties: Eagle, Lake |
$729,750 |
CO | Greeley (Metropolitan Area) Component County: Weld |
$417,500 |
CO | Silverthorne (Micropolitan Area) Component County: Summit |
$729,750 |
CO | Garfield County | $425,000 |
CO | Hinsdale County | $557,500 |
CO | Ouray County | $482,500 |
CO | Pitkin County | $729,750 |
CO | Routt County | $675,000 |
CO | San Juan County | $425,000 |
CO | San Miguel County | $651,250 |
CT | Bridgeport-Stamford-Norwalk (Metropolitan Area) Component County: Fairfield |
$708,750 |
CT | Hartford-West Hartford-East Hartford (Metropolitan Area) Component County: Hartford, Middlesex, Tolland |
$440,000 |
DC | Washington-Arlington-Alexandria, DC-VA-MD-WV (Metropolitan Area) Component Areas (DC): District of Columbia |
$729,750 |
DE | Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (Metropolitan Area) Component County (DE): New Castle |
$420,000 |
FL | Key West (Micropolitan Area) Component County: Monroe |
$729,750 |
FL | Miami-Fort Lauderdale-Pompano Beach (Metropolitan Area) Component Counties: Broward, Miami-Dade, Palm Beach |
$423,750 |
FL | Naples-Marco Island (Metropolitan Area) Component Counties: Collier |
$531,250 |
FL | Sarasota-Bradenton-Venice (Metropolitan Area) Component Counties: Manatee, Sarasota |
$442,500 |
GA | Greene County | $662,500 |
HI | Honolulu (Metropolitan Area) Component County: Honolulu |
$793,750 |
HI | Kahului-Wailuku (Micropolitan Area) Component County: Maui |
$790,000 |
HI | Kapaa (Micropolitan Area) Component County: Kauai |
$773,750 |
HI | Kalawao County | $716,250 |
ID | Jackson, WY-ID (Micropolitan Area) Component County: Teton |
$693,750 |
ID | Blaine County | $427,500 |
ID | Valley County | $462,500 |
MA | Barnstable Town (Metropolitan Area) Component County: Barnstable |
$462,500 |
MA | Boston-Cambridge-Quincy, MA-NH (Metropolitan Area) Component Counties (MA): Essex, Middlesex, Norfolk, Plymouth, Suffolk |
$523,750 |
MA | Providence-New Bedford-Fall River, RI-MA (Metropolitan Area) Component County: Bristol |
$475,000 |
MA | Dukes County | $729,750 |
MA | Nantucket County | $729,750 |
MD | Baltimore-Towson (Metropolitan Area) Component Counties: Anne Arundel, Baltimore, Carroll, Harford, Howard, Queen Anne's Also Component City: Baltimore |
$560,000 |
MD | Easton (Micropolitan Area) Component County: Talbot |
$443,750 |
MD | Ocean Pines (Micropolitan Area) Component County: Worcester |
$437,500 |
MD | Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (Metropolitan Area) Component County (MD): Cecil |
$420,000 |
MD | Washington-Arlington-Alexandria, DC-VA-MD-WV (Metropolitan Area) Component Counties (MD): Calvert, Charles, Frederick, Montgomery, Prince George's |
$729,750 |
MD | Garrett County | $437,500 |
NC | Elizabeth City (Micropolitan Area) Component Counties: Camden, Pasquotank, Perquimans |
$729,750 |
NC | Kill Devil Hills (Micropolitan Area) Component Counties: Dare |
$460,000 |
NC | Virginia Beach-Norfolk-Newport News, VA-NC (Metropolitan Area) Component Counties: Currituck |
$428,750 |
NH | Boston-Cambridge-Quincy, MA-NH (Metropolitan Area) Component Counties (NH): Rockingham, Strafford |
$523,750 |
NJ | Atlantic City (Metropolitan Area) Component Counties: Atlantic |
$453,750 |
NJ | New York-Northern New Jersey-Long Island, NY-NJ-PA (Metropolitan Area) Component Counties (NJ): Bergen, Essex, Hudson, Hunterdon, Middlesex, Monmouth, Morris, Ocean, Passaic, Somerset, Sussex, Union |
$729,750 |
NJ | Ocean City (Metropolitan Area) Component Counties: Cape May |
$487,500 |
NJ | Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (Metropolitan Area) Component Counties (NJ): Burlington, Camden, Gloucester, Salem |
$420,000 |
NJ | Trenton-Ewing (Metropolitan Area) Component County: Mercer |
$440,000 |
NM | Santa Fe (Metropolitan Area) Component County: Santa Fe |
$427,500 |
NV | Gardnerville Ranchos (Micropolitan Area) Component County: Douglas |
$468,750 |
NY | New York-Northern New Jersey-Long Island, NY-NJ-PA (Metropolitan Area) Component Counties (NY): Bronx, Kings, Nassua, New York, Putnam, Queens, Richmond, Rockland, Suffolk, Westchester |
$729,750 |
NY | Poughkeepsie-Newburgh-Middletown (Metropolitan Area) Component Counties: Dutchess, Orange |
$443,750 |
OH | Athens (Micropolitan Area) Component County: Athens |
$432,500 |
OR | Bend (Metropolitan Area) Component County: Deschutes |
$447,500 |
OR | Medford (Metropolitan Area) Component County: Jackson |
$422,500 |
OR | Portland-Vancouver-Beaverton, OR-WA (Metropolitan Area) Component Counties (OR): Clackamas, Columbia, Multnomah, Washington, Yamhill |
$418,750 |
PA | New York-Northern New Jersey-Long Island, NY-NJ-PA (Metropolitan Area) Component County (PA): Pike |
$729,750 |
PA | Philadelphia-Camden-Wilmington, PA-NJ-DE-MD (Metropolitan Area) Component Counties (PA): Bucks, Chester, Delaware, Montgomery, Philadelphia |
$420,000 |
PA | York-Hanover (Metropolitan Area) Component County: York |
$425,000 |
RI | Providence-New Bedford-Fall River, RI-MA (Metropolitan Area) Component Counties (RI): Bristol, Kent, Newport, Providence, Washington |
$475,000 |
TN | Nashville-Davidson--Murfreesboro--Franklin (Metropolitan Area) Component Counties: Cannon, Cheatham, Davidson, Dickson, Hickman, Macon, Robertson, Rutherford, Smith, Sumner, Trousdale, Williamson, Wilson |
$432,500 |
UT | Heber (Micropolitan Area) Component County: Wasatch |
$431,250 |
UT | Salt Lake City (Metropolitan Area) Component Counties (UT): Salt Lake, Summit, Tooele |
$729,750 |
VA | Charlottesville (Metropolitan Area) Component Counties: Albemarle, Fluvanna, Greene, Nelson Component City: Charlottesville |
$425,000 |
VA | Richmond (Metropolitan Area) Component Counties: Amelia, Caroline, Charles City, Chesterfield, Cumberland, Dinwiddie, Goochland, Hanover, Henrico, King and Queen, King William, Louisa, New Kent, Powhatan, Prince George, Sussex Also Component Cities: Colonial Heights, Hopewell, Petersburg, Richmond |
$528,750 |
VA | Virginia Beach-Norfolk-Newport News, VA-NC (Metropolitan Area) Component Counties (VA): Gloucester, Isle of Wight, James City, Mathews, Surry, York Also Component Cities (VA): Chesapeake, Hampton, Newport News, Norfolk, Poquoson, Portsmouth, Suffolk, Virginia Beach, Williamsburg |
$428,750 |
VA | Washington-Arlington-Alexandria, DC-VA-MD-WV (Metropolitan Area) Component Counties (VA): Arlington, Clarke, Fairfax, Fauquier, Loudoun, Prince William, Spotslvania, Stafford, Warren Also Component Cities (VA): Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas, Mannassas Park |
$729,750 |
VA | Winchester, VA-WV (Metropolitan Area) Component Counties (VA): Frederick Also Component City (VA): Winchester |
$475,000 |
VA | Lancaster County | $545,000 |
WA | Bremerton-Silverdale (Metropolitan Area) Component County: Kitsap |
$475,000 |
WA | Portland-Vancouver-Beaverton, OR-WA (Metropolitan Area) Component Counties (WA): Clark, Skamania |
$418,750 |
WA | Seattle-Tacoma-Bellevue (Metropolitan Area) Component Counties: King, Pierce, Snohomish |
$567,500 |
WA | Jefferson County | $437,500 |
WA | San Juan County | $593,750 |
WV | Washington-Arlington-Alexandria, DC-VA-MD-WV (Metropolitan Area) Component County (WV): Jefferson |
$729,750 |
WV | Winchester, VA-WV (Metropolitan Area) Component County (WV): Hampshire |
$475,000 |
WY | Jackson, WY-ID (Micropolitan Area) Component Counties (WY): Teton |
$693,750 |
GU | Guam | $651,250 |
MP | Northern Islands Municipality (MP-Marianas Islands) |
$605,000 |
MP | Rota Municipality (MP-Marianas Islands) |
$473,750 |
MP | Saipan Municipality (MP-Marianas Islands) |
$610,000 |
MP | Tinian Municipality (MP-Marianas Islands) |
$613,750 |