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FYI - New Limits Set for Fannie Mae, Freddie Mac, FHA
New Limits for Fannie Mae and Freddie Mac
Effective January 1, 2006 conforming loan limits on single family properties will be increased from $359,650 to $417,000. This loan limit increase reflects the changes in average house prices, as published by the Federal Housing Finance Board. Loan limits will also increase on other properties as follows:
$533,850 for mortgages on two-family properties (up from $460,400);
$645,300 for mortgages on three-family properties (up from $556,500); and
$801,950 for mortgages on four-family properties (up from $691,600).
Under the Fannie Mae and Freddie Mac charters loan limits in states and territories designated high-cost areas – Alaska, Hawaii, Guam and the U.S. Virgin Islands – are 50 percent higher than the amounts above. Please contact NAR at (202) 383-1102 if you have any questions.
FHA Limits to Increase
As a result of the increase in the conforming loan limit announced by the GSEs, the FHA floor limit will automatically increase for those loans insured on or after January 1, 2006. The new FHA limit will be $200,160 which is 48 percent of the new conforming limit (i.e. $417,000).
The high cost limit will be increased to as high as $362,790, which is 87 percent of the new conforming loan limit. However, since under the FHA program there is no nationwide limit, HUD will have to compute the individual limits for over 3200 US counties. HUD is expected to publish a new mortgagee letter announcing the areas that will be affected before the end of December.
The VA program may also be impacted by this change and will be reported soon. Please contact NAR at (202) 383-1233 if you have any questions.
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