Something that I’m sure that I will be receiving many calls on in the coming weeks as the media increases their coverage on the topic is the decrease in the conventional loan limits beginning October 2011. In 2008 when the mortgage industry was in a crisis, Fannie Mae and Freddie Mac allowed for the temporary increase in the loan limits for conventional loans under the Housing and Economic Reform Act. For most of the nation any loan over $417,000 is considered a jumbo loan. Jumbo loans typically have higher rates, higher credit score requirements and a minimum of 20 percent equity in the property. The increase was a big relief to high cost larger metropolitan areas such as Los Angeles, New York, Miami, Washington DC to name a few. These areas were able to get an expanded conventional loan limit, up to $729,750. The reason this is critical is because it kept many homes in these areas from being categorized as a jumbo loan. The expanded loan limits is set to expire this October causing these areas to mostly fit in the jumbo loan category. There is a push from these areas to have Congress extend the increased loan limits, which you will be hearing of in the media. Since the loan limits in Oklahoma were never increased, there will not be a reason to decrease our loan limits. In addition, the FHA loan limits for our area should remain the same as well. The loan limit for an FHA loan is $271,050. With our lower housing costs in Oklahoma, we are able to enjoy larger homes at a fraction of the cost of those in other metropolitan areas. Loans for veterans and Native Americans remain at higher limits as well. There is money available to lend for every loan size and usually at an economical cost. Oklahoma is economically sitting very pretty yet once again.

About the Author: Jolynn Craig

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