Fannie Mae/FHA/Freddie Mac to raise conforming limits to 2008 limits

2009 CONFORMING LOAN LIMITS INCREASED BY
AMERICAN RECOVERY AND REINVESTMENT ACT
WASHINGTON, DC –
The American Recovery and Reinvestment Act (ARRA), which
was signed into law on Tuesday, increased the maximum conforming loan limit for
mortgages originated in 2009. The increase affects 250 counties across the United States.
For these areas, identified in the attached table, Fannie Mae and Freddie Mac loan limits
will return to their late-2008 levels, which were up to $729,750 for one-unit properties in
the continental United States. Loan limits in other areas are not changed by the
legislation.
Conforming loan limits for 2009 were originally announced in late 2008 and had been
calculated under terms set forth in the Housing and Economic Recovery Act of 2008
(HERA), passed in July. The new ARRA legislation stipulates that, for loans originated in
2009, the loan limit is to be the higher of the 2008 limits and those originally calculated
for 2009 under HERA. Where the 2008 and 2009 limits differ, the 2008 limits tend to be
higher and thus, in most cases, loan limits are reverting back to last year’s levels. For the
relatively few counties where 2009 limits actually increased (43 counties in Virginia, North
Carolina, and California), the new limits will remain at the higher level.
Notable elements of the new legislation:

1. The Director of FHFA is given the authority to increase loan limits levels for “subareas”
under provisions in ARRA. Given the implementation difficulties associated
with establishing multiple limits for any given county, FHFA’s Director currently
has no plans to use this discretion.

2. The loan limits established under ARRA apply to all loans originated in 2009. For
loans purchased in 2009 that were originated from July 1, 2007 through December
31, 2008, the same limits will apply. For loans purchased in 2009, but originated
before July 1, 2007, the limits previously announced by FHFA on November 7 ,
2009 and updated in December will apply. For example, a $700,000 mortgage
originated in 2006 would not be eligible for purchase this year, even if the
applicable local limit under ARRA is $729,750.

Several lookup tables are available at www.ofheo.gov/Regulations.aspx?Nav=128 that
provide detailed information about local area loan limits. A full county listing is provided
showing loan limits for every U.S. county and county-equivalent. Also provided is a table
showing those metropolitan areas where the new 2009 loan limits exceed the baseline
$417,000 level for one-unit properties.


The Federal Housing Finance Agency regulates Fannie Mae, Freddie Mac and the 12 Federal Home Loan Banks. These government-sponsored enterprises provide more than $6.3 trillion in funding for the U.S. mortgage markets and financial institutions.