Winding Down Fannie Mae, Freddie Mac

The government is reducing the amount of mortgage loans it will guarantee effective October 1st, so there’s a rush by buyers to get an expensive property before the deadline goes into effect.

This is a rare bit of good news for the housing market.

Report:

On Oct. 1, the maximum loan amount that Fannie Mae and Freddie Mac is set to decrease from $729,750 to $625,500. This might make mortgages more expensive or more difficult to get for buyers in high-cost areas, MSNBC.com reports.

For example, after Oct. 1, a borrower who seeks a government-backed mortgage for a $1-million property may have to come up with a $370,000 down payment instead of $270,000, Rob Chrisman, a mortgage banking consultant from San Rafael, Calif., told MSNBC.

Up until 2008, any loan more than $418,000 was considered a jumbo loan, but that later swelled to $625,500 and then was temporarily set at $729,750 (which expires at the end of September).

About Luke Ford

Raised a Seventh-Day Adventist at Avondale College in Australia, Luke Ford moved to California in 1977. He graduated from Placer High School in 1984, reported the news at KAHI/KHYL radio for three years, attended Sierra College and UCLA, was largely bedridden by Chronic Fatigue Syndrome for six years, and converted to Judaism in 1993. From 1997-2007, Luke made his living from blogging. Living by Beverly Hills (Alexander90210.com), he now teaches the Alexander Technique (moving the way the body likes to move). Lessons cost $100 each and last about 45 minutes. In 2011, Luke completed a three-year teaching course at the Alexander Training Institute of Los Angeles. His personal Alexander Technique website is Alexander90210.com. Luke is the author of five books, including: » The Producers: Profiles in Frustration » Yesterday’s News Tomorrow: Inside American Jewish Journalism
This entry was posted in fannie mae, freddie mac, mortgage and tagged , , , , , . Bookmark the permalink.