A quick update on the political gymnastics on display over the proposed increase to conforming loan limits, from our source:
"Bottom-line, to date the Senate Finance Committee bill…DOES NOT CONTAIN the raising of loan limits for FHA, Fannie, and Freddie. The House bill DOES CONTAIN the raising of the loan limits but does not contain the tax treatment provisions. We must now hope that if the House bill is the one passed, that an amendment will be added to include the favorable tax treatment provisions so that both the mortgage and home building industries could be participants in the stimulus. If the Senate Finance Committee bill gets passed, then hopefully it will contain an amendment to raise the loan limits."
In other words, the exact nature and scope of the housing related elements in the stimulus bill is still very much up in the air and far from done.
Also, for the home (MN) crowd: If congress DOES raise the conforming limit to $625/$725/$730/Whatever it will likely have no impact here. That’s because an increased conforming limit is not an across the board increase.
It works like this: The limit can be increased to 125% of the Median Sales price of the Twin Cities MSA with a FLOOR of $417,000. That "floor" part is important, because the Median Sales Price in our MSA is roughly $232,000 (125% of that number is $290k.)
In other words, Twin Cities conforming limits won’t change, and will stay at $417k.
Related: News on Conforming Limit Increase: $625,000? [BTM]