HR 5140, The Economic Stimulus Package and You!
Some people I have talked to lately have being doing the math and checking it twice…trying to figure out of they will be receiving their $600 rebate check in the mail. Well the Economic Stimulus Plan is much, much more than just a rebate check. For a high cost housing area such as ours, it means lower rates and the easing of jumbo loan rates. I believe that relief is coming to the Northern Virginia area. We all just have to be patient for the next couple of weeks and see how everything “shakes out.”
The stimulus package is expected to be signed sometime next week by President Bush. Specifically, the stimulus package temporarily raises the size of mortgages that government-sponsored mortgage companies Fannie Mae and Freddie Mac can buy and market as securities. The rate will go from the current threshold of $417,000 to as high as $729,750 in higher cost areas. Eligible loans must be made by December 31st of this year when the limits would revert back to their existing levels unless Congress extends the cutoff date.
What does this mean for our area? Well, the U.S. Department of Housing and Urban Development will be the government agency that decides what loan limits apply in various parts of the country. In our area of Northern Virginia, it's VERY likely that higher limits will apply.
This change to a higher “conforming loan” limit will allow more homeowner or prospective homeowners to buy homes and refinance their existing loans at a lower interest rate. Anyone wanting to buy a home with a loan amount that is higher than $417,000 currently has to typically sign up for a “jumbo” loan, which means a higher interest rate and very stringent qualification requirements with high down payments.
This will hopefully encourage buyers to take advantage of the large inventory of homes on the market. This will also help home sellers as more buyers enter the market and take advantage of the new financing provisions. Bottom line…if you live in Northern Virginia and have a house to buy or sell, hopefully things will be getting better real soon.
I am currently working with a family that is hoping to take advantage of this stimulus package and buy a home in the western Fairfax County area. Home they could not look at last month may become available to them next month! They hope to be one of the first home loans under this new stimulus package!
The stimulus package is expected to be signed sometime next week by President Bush. Specifically, the stimulus package temporarily raises the size of mortgages that government-sponsored mortgage companies Fannie Mae and Freddie Mac can buy and market as securities. The rate will go from the current threshold of $417,000 to as high as $729,750 in higher cost areas. Eligible loans must be made by December 31st of this year when the limits would revert back to their existing levels unless Congress extends the cutoff date.
What does this mean for our area? Well, the U.S. Department of Housing and Urban Development will be the government agency that decides what loan limits apply in various parts of the country. In our area of Northern Virginia, it's VERY likely that higher limits will apply.
This change to a higher “conforming loan” limit will allow more homeowner or prospective homeowners to buy homes and refinance their existing loans at a lower interest rate. Anyone wanting to buy a home with a loan amount that is higher than $417,000 currently has to typically sign up for a “jumbo” loan, which means a higher interest rate and very stringent qualification requirements with high down payments.
This will hopefully encourage buyers to take advantage of the large inventory of homes on the market. This will also help home sellers as more buyers enter the market and take advantage of the new financing provisions. Bottom line…if you live in Northern Virginia and have a house to buy or sell, hopefully things will be getting better real soon.
I am currently working with a family that is hoping to take advantage of this stimulus package and buy a home in the western Fairfax County area. Home they could not look at last month may become available to them next month! They hope to be one of the first home loans under this new stimulus package!
posted by kristinburns at 11:58 AM
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