One of my buyer client who is in the market to buy a house in the $1.5M range asked me this weekend about the possible lowering of the High Balance Jumbo loan limit, so here is them answer:
Steven, I just wanted to get back to you about the issue of the high balance jumbo loans we spoke about yesterday. So indeed, the High Balance Jumbo limit which is currently at $729,750 in Los Angeles (FHFA, the Federal Housing Finance Agency rates certain areas as “High Cost Loa Limits areas, such as Los Angeles), is scheduledto go down to $625,000 after Sept 30, 2011. It is scheduled but it will not necessarily go through as Congress still has the power to extend it, which is what they have been doing lately. It will depend on the state of the market at that time and what kind of option are out there for high balance loans. Lately, more and more lenders are coming back into the high balance mortgage market and some of their products are actually pretty interesting. Given the fact that the high real estate market is still in pretty bad shape, I would expect and hope that the FHFA will extend the Jumbo High Balance loan limit for another year but we shall see…
