East Bay Area Real Estate

CAR - California Association of REALTORS addresses the Economic Stimulus Package.

The Senate passed an economic stimulus package today, Thursday, February
07, 2008. The Senate version includes the same increases to the conforming
loan limits for both GSE and FHA found in the House stimulus package. The
House just passed the Senate version of the bill and it will now be sent to
the White House. The President is expected to sign the legislation by the
end of next week, ahead of the Congressional self-appointed deadline of
February 15th. The increase in the conforming loan limits will last
through 2008.

Borrows Will See Immediate Relief

The U.S. House of Representatives passed a stimulus package last week that
raised the FHA and conforming loan limits to as high as $729,750 in
high-cost areas, up from $417,000. By increasing the loan limits, borrowers
will see immediate relief with new liquidity in the mortgage market and the
nation will see an additional 300,000 home sales. Since August 2007, the
interest rates for jumbo borrowers have been more than 1 percentage point
higher than conforming loans.

Increasing the FHA loan limits is critical to bolstering California’s
housing market.

Alleviate Downward Pressure on Housing Markets

Additionally, raising Fannie Mae and Freddie Mac’s (GSEs) conforming loan
limit will provide immediate relief to borrowers and alleviate downward
pressure on current housing markets. For instance, increasing the GSE loan
limit could result in more than 300,000 additional home sales and strengthen
current home prices by 2-3%.

Provided by Guest Blogger Melissa Lyckberg -  Marin Real Estate