bentleyWIRE | blogged

    The US Senate passed an expanded version of HR 5140 – an economic stimulus package that includes a temporary increase in the conforming loan limits from $417,000 to as high as $730,000 in high cost areas. Unfortunately, the higher loan limits will be limited to high cost areas and the $417,000 limit will remain in effect for most of the country.

    You may ask "how does that benefit me"?  By increasing the conforming limit, lenders would have a reliable source to unload jumbo loans in Fannie Mae and Freddie Mac. This would ultimately lead to a reduction in interest rate that a lender would be willing to accept for this type of loan.  In theory, this should stimulate loan activity by increasing affordability in high cost areas.

    Over the next few days, the Bentley team will be analyzing the details of this bill and we will keep you posted as we have more information.

Sources and helpful links:

• Bloomberg News
• HR 5140