Loudoun County FHA Conforming Loan Limits To Be $625K

As part at the $300 billion mortgage rescue plan, the House and Senate will approve a new, more permanent FHA conforming limit amount of $625,000. This is in an effort to help home buyers who need jumbo loans to borrow money at more affordable rates.

The originial limit for the Washington, DC area (including Loudoun County) and other high-cost areas was raised from $417,000 to $729,750 in March, but that was only through the end of the year. The new bill will make the limit of $625,000 more permanent.

The legislation has been approved by the House, President Bush said he would sign it and the Senate is likely to approve it. But the Senate has not released an exact time frame for their final approval.

Fannie Mae Lending Guidelines Change; More Strict On Borrowers

In conjuction with the temporary raise in loan limits, Fanne Mae has announced new lending guidelines for these new "jumbo-conforming" loans, which are more strict on borrwers than before. The possibility of this happening is why we wrote a post questioning whether the economic stimulus bill and higher loan limits would have a positive or negative effect on the housing and lending market.

In a nutshell, the new guidelines state that you:

• must have more money for a down payment
• need higher credit scores than before (in some cases)
• must have more money in reserves
• need to have less debt
• have to use at least 5% of your own money for a down payment rather than using all of the gift money from family towards the down payment
• are not allowed to receive more than 3% seller concessions

Here’s the above "in a nutshell" summary in more detail (directly from Fannie Mae):

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