New Conforming Loan Limits - The Real Story

The US Senate passed an expanded version of HR 5140 – an economic stimulus package that includes a temporary increase in the conforming loan limits from $417,000 to as high as $729,750 in high cost areas. The two things you must know in order to determine if you are in a high cost area:

1. You must know the formula. If 125% of the local area median home price exceeds $417,000, the temporary loan limit would be that 125% of the median home price with a cap of $729,750.

2. You must know the median home price in your area. According to HR 5140, the Secretary of Housing and Urban Development will publish the median house prices within 30 days. The Public Affairs office of HUD was asked if there is anything definitive to reference in the interim, and they said, "no." The Wall Street Journal published median house prices recently, and you may want to reference this information to get an idea of which areas will exceed the $417,000 limit.

Here are some examples of average home prices in Virginia:


Lynchburg: $146,071
Richmond $232,536
Roanoke $151,288
Virginia beach / Norfolk $241,535
Washington, D.C. Metro $434,718

Looking at these numbers, only the Northern Virginia area will see higher conforming loan limts of up to $543,398.

To check the numbers in other areas go to The Wall Street Journal.


I will continue to keep you informed!


Paul Cantor is a pricipal of TrustMor Mortgage Company in Richmond Virginia. He may be contacted at 804-433-1510 or on the web at www.PaulCantor.com.