With 2008 fast approaching, new rules and guidelines have to be decided and published for future guidance. The words are in: The Conforming loan amount for 2008, will stay the same: $417,000.
It’s been argumentative for some years that lenders and real estate industry have urged Legislatives to raise the confirming loan amount higher than $417,000, since in California especially, average housing price in Northern Cal, $700,000 for single family home, and $450,000 for condominium/town house (Santa Clara County), while the average housing price nationally, $220,000. The national conforming loan amount cannot buy Californian a decent condo!!! California needs a different standard.
Back to the boom time, when money is easy, interest rates are low, lender will give you money to buy house even you don’t have money in the bank. Now, things are different, money is not easy to get and restrictions on applying loans are enforced more than ever.
California is still the robustest housing market. Let’s wait till this sub-prime crisis leveled and housing slow-down wave subsides, this loan limitation will be brought up again to the Legislatives in no time.