If you follow our twitter feed, you'll know that conforming mortgage limits will remain at $417,000 for 2009 in the Twin Cities.
As for FHA limits in the Twin Cities area, they are going down, from $364,000 to $318,500 in most of what we'd consider metro area counties. Here's a chart:
Due the the lower down payment requirements and more liberal credit standards, FHA is rapidly becoming the default option for many borrowers. Accordingly, the 2009 limits will put marginal pressure on home prices above the limit, since the pool of eligible buyers for those properties will be limited to only those that qualify for conventional financing, which requires at least 5% down and has tougher credit standards.
New limits go into effect Jan 1st, 2009.