Every year the Office of Federal Housing Enterprise Oversight (OFHEO) sets the maximum loan amounts that Fannie and Freddie may purchase. These limits determine what in conforming and what is jumbo. It just so happens that the mounts have not changed for the last three years despite the increase in pricing. Here is the list:
$417,000.00 for a single unit, (single family, condo, townhouse, loft ...)
$533,850.00 for two units, (2-flat...)
$645,300.00 for three units, (3-flats...)
$801,950.00 for four units, (4-flats...).
What these numbers show is simply that the OFHEO has ignored all the changes taking place in the market place and more specifically it does not take into consideration the regional differences: California, Michigan, Florida and Ohio are treated the same! It does not really matter to them that in California, $417,000 does not buy you anything.
The jumbo crisis that we are experiencing owes some of its origins to this refusal to account for regional differences. By keeping the limits unchanged three years in a row, the OFHEO simply contributes to the mess we are facing.
How can we expect to solve the current housing crisis if we continue to operate under outdated guidelines? New York Senator Schumer earlier this year proposed to raise these limits but nothing apparently was done but the talk on helping strapped home owners goes on.
What we need is a sound and coherent housing policy, one that will address the issues that really matter, so far we have heard lots of speeches but no real action.
For more information on mortgage programs and loan limits visit us on line at http://www.p2funding.com/
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