The Economic Stimulus Act, Direct Mortgage, and You!
HR Bill 5140, the Economic Stimulus Act of 2008—which effectively increases conforming loan limits—has passed Congress and may become law as early as today.
Direct Mortgage is poised to act rapidly on this exciting development.
The first step in making these modifications available to borrowers is for FHA, Fannie Mae, and Freddie Mac to execute the changes, followed by the secondary market’s implementation. Then as quickly as the new limits are available to us, we will incorporate them into our loan products. Direct Mortgage will notify you as soon as these changes are available.
Highlights of the Stimulus Act:
General
- Provides a temporary conforming loan limit increase for Fannie Mae, Freddie Mac, and FHA loans
- The increases terminate at the end of this year (December 31, 2008)
Increases for Fannie Mae and Freddie Mac:
- The maximum loan amount may equal up to 125% of the area median price
- The loan amount may not exceed 175 of the 2008 HUD county limit
- As long as the mortgage is originated by the end of the year, the actual purchase may take place in 2009
Increases for FHA:
- Lesser of
- 125% median house price for 1-family residences; for 2-, 3-, or 4-family properties, a percentage of the median house price equal to the ratio of 2008 loan limits of 2-, 3-, or 4-family property compared to a 1-family property; or
- 175% of current 2008 loan limits
- The limit for high cost areas may go as high as $729,750
- The limit in low cost areas may go as high as $271,050
- These limits may be raised by an additional $100,00 if warranted
- HUD has 30 days from the enactment of the bill to publish revised median house prices and maximum loan limits.
Higher Limits Currently Available:
Direct Mortgage currently offers non-conforming loan programs. Call 800-924-3884 to find out more about our non-conforming loans, or go to www.directmortgagewholesale.com.