Fannie Mae & Freddie Mac Loan Limits Extended to 2010

Freddie Mac Maximum Loan Limits Are Unchanged for 2010

On November 12, Freddie Mac announced that our base conforming loan limits will be maintained at their current 2009 levels for 2010, with the maximum loan limit for a 1-unit single-family property remaining at $417,000. The temporary high-cost loan limits for properties located in designated high-cost areas will remain unchanged for 2010 as well.

- High-Cost Loan Limits

As a reminder, the loan limits in designated high-cost areas are the higher of the temporary limits established by the Economic Stimulus Act of 2008 (maximum of $729,750 for 1-unit single-family properties) and the permanent limits established by the Housing and Economic Recovery Act of 2008 (maximum of $625,500 for 1-unit single-family properties).

Actual loan limits for a specific high-cost area may be lower than the maximum permitted loan limit. It is important that you review the 2010 loan limits permitted for a specific county, which the Federal Housing Finance Agency (FHFA) determines and makes available on its Web site <http://www.fhfa.gov/Default.aspx?Page=185>.

- Super Conforming Mortgages

The recently enacted extension of the high-cost loan limits through year-end 2010 applies to all super conforming mortgages with note dates on or after October 1, 2008, and on or before December 31, 2010. There are no changes to our super conforming mortgage requirements as a result of the extension.

- Operational Impacts

Because the 2010 loan limits are unchanged from 2009, there are no impacts to Loan Prospector or the selling system.

The Single-Family Seller/Servicer Guide (Guide) <http://www.freddiemac.com/sell/guide/> will be updated in an upcoming Guide Bulletin to reflect the extension of our current loan limits through 2010, as well as the eligible note dates for super conforming mortgages.

For More Information

- Review the 2010 base conforming loan limits <http://www.freddiemac.com/sell/selbultn/limit.htm> and the higher loan limits in designated high-cost areas <http://www.freddiemac.com/sell/selbultn/limit.htm> as permitted under ARRA.

- View the 2010 loan limits <http://www.fhfa.gov/Default.aspx?Page=185> in designated high-cost areas as published by FHFA.

- Learn more about our super conforming mortgage requirements <http://www.freddiemac.com/singlefamily/mortgages/super_conforming.html>.

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We Bounced Right Off The 25-Day Moving Average

President Obama Signs Extension of Loan Limits

Conforming loan limits, as well as FHA loan limits, will remain at their higher levels through 2010.  This will help keep some liquidity in the markets as Fannie Mae and Freddie Mac may still purchase loans with amounts up to $417,000 in most areas of the United States.  Other “high cost” areas will allow the Guaranteed Security Enterprises to purchase loans with amounts up to $725, 750.00.  And FHA loan limits will remain at $400,000 in Butte County.

$40 Billion 3-Year Treasury Note Auction

Wow…$40 Billion!  The Auction fared quite well, actually.  It helped keep rates really low.  My concern would be with the longer termed Treasuries and the riskier investment those can pose.  It will be interesting to see how the rest of the Auction throughout the week will fare.  Foreign participation has been fairly respectable.  It’s understood that the more the foreign market participates, the stronger the dollar will remain.  The stronger the dollar, the more we can purchase foreigners’ exports.

Locking Advice

It’s a great time to lock.  We’ve seen Mortgage-Backed Securities touch the 25-Day Moving Average.  Actually, later this morning, we were above that level of resistance, however, we come back down and are sitting on it, as I write this blog.  If you don’t lock, and float into the week, you had better be prepared to lock, quickly.  I don’t see a lot of economic data that will push us up, over this 25-Day Moving Average level of resistance.

Related Must Reads

What Lead To Higher Conforming and FHA Loan Limits?
Why Be Leery of Yesterday’s Treasury Auction
How Levels of Resistance Effect Rates

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