Hollywood Riviera & South Bay Real Estate Blog

Remember the Economic Stimulus Act of 2008?  That was not put in place forever – only for 2008 (as the title would suggest.)  Congress authorized temporary increases to the conforming loan limit ($417,000)  in high cost regions – like ours - mortgages as large as $729,750 are considered “conforming.”  This has been welcomed news to buyers in our area.  While I hate to look a “gift horse in the mouth,” it’s still not a lot of money.  If you look at it this way…many homes in our South Bay neighborhoods are $1 million.  If an average buyer (honestly not average buyer when they are buying a million dollar house – I’d personally call this above-average) has 20% to put down ($200,000) they still need an $800,00 loan – this still exceeds the $729,750 loan limit for what would be considered “conforming.”   It’s still not enough.  The buyers today need to come in with more down, up to 30% to make a lot of deals work.   The sad news is that like I said above, this is the loan limit for 2008 – that means that it ends Dec 31st, 2008.   Starting January 1st, 2009 the conforming loan limits for our high cost areas will be capped at $625,500.  That is not good news if you ask me.  If you are a buyer right now with the where-with-all to qualify and obtain a loan…..then you better hurry!  Now is the time!

No related posts.