Memo to Bay Area home buyers and owners: Your days to buy or refinance homes using big loans set at low interest rates are numbered.
As part of the economic stimulus bill that became law in February, loan limits on government-backed mortgages were increased in areas around the country where housing costs are high. That allowed more borrowers to benefit from the lower interest rates associated with loans backed by mortgage financing companies Fannie Mae and Freddie Mac, and the Federal Housing Administration. The change was designed to encourage more home-buying.
In the Bay Area, the maximum for these "agency jumbo" or "high-balance conforming" loans was temporarily increased to its current level of $729,750.
But the expanded loan limits expire Dec. 31. In Santa Clara County and across most of the Bay Area, the maximum for loans backed by Fannie and Freddie will drop to $625,500 as of Jan. 1, the federal government announced Friday. The FHA is expected to announce the same new limit for this area today. read more
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