The following article from the National Association of REALTORS® addresses new FHA, Fannie Mae and Freddie Mac conforming loan limits were released. I thought it would be pertinent to share this information with you:

The article was written by N.A.R. President, Dick Gaylord.

	I know you've all been waiting for some relief to our current market conditions, and it arrived today: the new FHA and Fannie Mae- Freddie Mac conforming loan limits have been released by the U.S. Department of Housing and Urban Development. To find out the new limits in your area, simply click on this link: https://entp.hud.gov/idapp/html/hicostlook.cfm, which will take you to the "mortgage limits" page at the HUD web site. On that page, enter your state and county information, chose the type of loan from the "Limit Type" drop-down box (FHA Forward, Fannie/Freddie or HECM). [Note: FHA Forward is what HUD is calling the temporary FHA loan limit.] Then click the "send" button at the bottom of the page. On the results page, you'll see the new loan limit for the type of loan you selected for your area. You can also find a county-by-county listing of the new FHA and Fannie Mae-Freddie Mac loan limits at REALTOR.org by following this link: http://www.realtor.org/GAPublic.nsf/files/chart_hud_loan_limits_08.pdf/$FILE/chart_hud_loan_limits_08.pdf The new loan limits for FHA and Fannie Mae and Freddie Mac are now calculated at 125 percent of the HUD published median prices, with a floor of $271,050 and $417,000, respectively, not to exceed $729,750. The impact of these loan limits are expected to increase the housing market significantly because of the infusion of capital into the mortgage market, which should result in lower interest rates across the board. In addition, there will be a direct impact on high-cost areas that previously required borrowers to take out costlier jumbo mortgages. As NAR research points out, increasing FHA loan limits will help an additional 138,000 Americans achieve the dream of home ownership and will allow nearly 200,000 homeowners to refinance and potentially keep their home. In addition, NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the housing finance market, which continues to be severely stressed, by providing an immediate infusion of much needed liquidity to the nation’s mortgage market. An economic impact study conducted by NAR in January 2008 estimated that increasing the GSEs’ conforming loan limits would result in as many as 500,000 refinanced loans and could help reduce foreclosures by as much as 210,000. In addition, over 300,000 additional home sales could be generated, housing inventory would be reduced and home prices would be strengthened by two to three percentage points. HUD was mandated in the Economic Stimulus Act to publish new loan limits within 30 days of the bill's signing by President Bush on February 13. NAR strongly supported this economic stimulus package because of the relief we felt it would bring our members.
National Association of REALTORS® 430 N. Michigan Ave. Chicago, IL 60611

Mortgage Insurer Tightens Standards
Beginning next month, MGIC Investment Corp., the country’s largest mortgage insurer, will reduce its exposure in weak housing markets by requiring at least 5 percent down on homes in what it calls restricted markets.

These markets include the entire states of Arizona, California, Florida, and Nevada, as well as the metropolitan areas of Washington, D.C., Detroit, Chicago, Boston, and Atlanta.

Home owners hoping to insure condos will have to put down 10 percent.

The company also will refuse to insure mortgages with little or no documentation, nor will it insure investment property loans in restricted areas. Home owners in the restricted markets who put down 10 percent will have to have FICO scores of at least 620 out of a possible 850. If they put down less, their scores will have to be at least 680.

Home owners typically must get mortgage insurance when they put down less than 20 percent of their home’s value.

MGIC expects the new requirements to result in the issuance of fewer new policies, according to its filing with the Securities and Exchange Commission.

Competitor PMI Group Inc. also announced in a filing that it would stop covering home loans with loan-to-value ratios of more than 97 percent.

Source: The Associated Press, Emily Fredrix (02/11/08)

What is considered a soft real estate market for many is truly opportunity for the savy first time home buyer.

In recent years, it has been a fast paced sellers market making it difficult for the first time home buyer to find the right property at the right price. They have often been forced to settle for less home at top dollar.

But, now the home selection is excellent and with prices certainly being negotiable, it seems the first time buyer has the best of both worlds.

To make home ownership even more enticing, interest rates have now declined and lenders value the business of a first time home buyer as first time buyers pose a better credit risk generally having lower debt to income ratios.

It appears the moon and stars have certainly aligned for the first time home buyer! If you are a first time home buyer, the time to buy is NOW!!! Don't be sitting on the sidelines a year from now saying I woulda, coulda, shoulda.....