President Obama late last week signed a continuing resolution that included a provision extending through fiscal year 2011 the current conforming loan limit of $729,750 for high-cost areas, including many in California. The same limits also will be extended to loans insured by the Federal Housing Administration.
The conforming loan limit determines the maximum size of a mortgage that government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac can buy or “guarantee.” Non-conforming or “jumbo loans” typically 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.
Source: C.A.R.
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