By E. Alice Miranda, BNAR President
October 1, Congress allowed conforming loan limits to revert from 125
percent of the local area median home price to 115 percent of the local
median home price. That has effectively reduced the size of conforming
loans for many home buyers across the country. According to the Buffalo
Niagara Association of Realtors®, these new loan limits will have a big
impact on our nation’s housing market.
new loan limits mean fewer people will have access to affordable
mortgage loans, and the loans that are available will be more expensive.
The National Association of Realtors® predicts that five to 10 percent
of consumers will face higher mortgage rates as a result of this change,
at a time when housing is still in recovery.
lower loan limits will impact 669 counties in 42 states and the
District of Columbia, with an average Federal Housing Administration
loan limit reduction of more than $68,000.
fight isn’t over. Realtors® are continuing to work closely with members
of Congress and a coalition of industry partners to reinstate the
higher loan limits as soon as possible, because we want to make sure
that homeownership is more affordable and accessible for hard-working
families across America.
BNAR points out that home buyers aren’t the only ones who will feel the
effects of the new loan limits. The lower loan limits will reduce the
number of qualified buyers, which means homeowners would have a hard
time selling their homes.
FHA mortgage loan limits are critical to providing liquidity in today’s
housing market, especially since the private market has yet to return.
The FHA mortgage programs have played an important and vital role in the
housing market’s recovery and we cannot do anything to jeopardize that
process. Our nation’s economy and well-being rely on the full recovery
of the housing market.
decades, many first-time home buyers have relied on FHA-insured loans
to purchase a home, especially since in many cases only a 3.5 percent
down payment is required. The BNAR estimates that one-third of recent
buyers purchased their homes with an FHA-insured mortgage.
the leading advocate for homeownership, Realtors® are working hard to
make sure anyone who is able and willing to assume the responsibilities
of owning a home will have the opportunity to pursue that dream.
Mortgage availability remains a top concern and we are determined to
reinstate the higher loan limits as quickly as possible.