Minnesota Housing Updates- FHA, Fannie and Freddie extend limit increase
Additional steps were taken this week to help the collective housing market. As we continue to see challenges in the Minnesota Housing market, and across the country the government is still taking steps to mitigate the problems we are seeing regarding financing but only in “high cost markets” The major factors we see with financing is the strict requirements banks have and the lack of comps to support appraisals. In Minnesota the challenges we have faced for the past two years are still apparent, tougher financing requirements and decreasing prices.
The site Inman News published an article recapping this. We have listed an excerpt below.
“Congress has approved legislation extending for one year the existing loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration, allowing the loan guarantee and insurance programs to continue backing loans of up to $729,750 in markets with the highest cost of living.
“Extending the existing limits is essential to helping borrowers continue to have access to affordable long-term, fixed-rate mortgage credit in today’s struggling economy,” the Mortgage Bankers Association said in welcoming the move.
“The current limits have been a key component of keeping the mortgage market functioning, helping keep mortgage interest rates low for consumers who want to purchase a home or refinance an existing mortgage.”
In addition to extending the loan limits through Sept. 30, 2011, HR 3081 expands the FHA’s capacity to back multifamily loans, ensuring continued funding for development, renovation and mortgage refinancing to preserve affordable rental housing, the MBA said.
Congress instituted temporary increases in the $417,000 conforming loan limit in high-cost areas in 2008, allowing Fannie Mae and Freddie Mac to to buy or guarantee loans of up to 125 percent of the median home price in high-cost areas.”