The National Association of Realtors has called on Congress and the Bush administration to increase the loan limits for Fannie Mae and Freddie Mac from the current ceiling of $417,000 to $625,000. National Association of Realtors President Dick Gaylord noted, “This change will permit more families to enter the housing market by making more mortgages available with lower interest rates. Increased home sales will lower inventories and immediately start stabilizing the housing market and the economy.” Currently, if you mortgage more than $417,000 you will pay on average 1.8% more than a conventional loan.
Our reaction – We think that it’s a shoe in, but the change would certainly help sustain a healthier real estate market in the more expensive cities in the United States. We also wonder what credit scores banks and lenders would require to finance this new $625,000…we would not be surprised to hear 725 or higher.
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