On October 1st Fannie, Freddie, and the Feds will be lowering the maximum amount the government will guarantee on Jumbo loans. The new limits will vary by region. Under the new rules, the maximum eligible loan will fall from $729,750 to $625,500.
If you have buyers "on the fence," now's a good time to have a conversation with them and make sure they understand the potential ramifications of this.
As for the effects on the housing market in general, the jury's still out. Some folks are predicting that banks will step in and fill the gap by lowering lending requirements and rates in the hopes of capturing a bigger slice of the jumbo pie.
Here are some current stories on the subject:
Bloomberg: Banks May Soften Blow of Jumbo Loan Limits
Wall Street Journal: Rebound or Retreat After Mortgage-Cap Declines?
