Outer Banks Stimulus Program - will loan limits change on the Outer Banks in 2008?

I had a comment on my post about the governments stimulus program signed by the President last week.

So what exactly IS the limit on loans that are not considered jumbo for the Outer Banks now? Is it still $417,000?

Good question Key - first what we know.  Conforming loan limits on the Outer Banks are currently set at $ 417,000.  Why does this matter so much - it is because conforming rates are anywhere between 1.25% and 1.5% less expensive than Jumbo Rates.

HUD has 30 days from the day the President signed the package into law to identify the impacted MSAs (Metropolitan Statistical Areas) – meaning sometime in mid-March, all mortgage lenders will simultaneously receive the official notification.  The current Dare County MSA is listed at $ 349,600.  Currituck County stands at $ 313,500. 

Now for what we don't know.

Although several mortgage lenders have promoted lists of what they believe the new limits will be, these are only estimates because HUD has yet to determine the higher loan limits. We know that HUD will determine the new loan limits based on the median area sales prices. But, we do not know what timeframe will be considered … will it be the:

·         previously published prices from the third quarter of 2007?

·         yet-to-be announced prices from the fourth quarter of 2007?

·         yet-to-be announced prices for the entire 2007 sales year?

Because of the changes in the mortgage industry, the median area sales prices may be dramatically different throughout the year. So the timeframe used by HUD to determine the higher loan limits is key. 

We expect the impacted areas to be announced in mid-March and remain in effect until Dec. 31.

At this point - the Outer Banks is not considered a high cost area.  We could see conforming loan limits remain at $ 417,000 for Dare and Currituck Counties.  We could see FHA limits increase but that would just help those looking to purchase primary residences.  Second and Vacation homes would be out of the picture.  For now - we will all have to wait and see what happens. 

Comments

[Key]

Thanks, Ronnie. Leave it to the government to make something so complicated! And to think that one of their purposes was to provide help quickly. Thirty more days to determine a basis? Hmmm.....
I trust that you will let us know as soon as the Hud number is determined what that may be and if it affects the mortgage limit for the Outer Banks properties or not. That one percent or so in mortgage rates can make a big difference in some cases.