On Thursday, November 29, 2012, the Federal Housing Finance Agency announced that the maximum dollar limits for conforming loans will remain at 2012 levels for Freddie Mac and Fannie Mae in 2013. This applies to one unit properties across the country, however some "high cost" areas may have limits as high as $625,000. Multi-unit loan limits will also remain the same, as these are "simply multiples of the one-unit limits."
How are loan limits established?
Loan limits are determined by the median home values in local areas, and are established annually under the terms of Housing and Economic Recovery Act of 2008.
This method applies to both the determination of conforming limits and limits for higher cost areas.
Why did 2013 loan limits remain unchanged from 2012?
While recent Home Price Index numbers have increased, they have not fully offset the "cumulative decline in prior years." For example, the U.S. home price fell "more than 19 percent through mid-2011," and under the rules of HERA, the prior declines in price must be "fully offset before loan limits can increase."
What is the bottom line?
The bottom line is that now is a great time to consider a home purchase or refinance, as home loan rates remain near historic lows.
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