The Petalumahomes.com Realty WebLog

 The new package could have an immediate impact on our country and potentially, your bottom line 

How You May Benefit From This Exciting New MeasureEarly Wednesday, President Bush approved a national economic stimulus package designed to help thousands of families, the housing market and the

 The multi-faceted stimulus package includes a temporary increase of the conforming loan from $417,000 to as high as $729,750* and a temporary increase of the FHA loan from $362,750 to $729,750* through December 31, 2008. 

An increase in the loan limits that Government Sponsored Enterprises, like Fannie Mae and Freddie Mac, can buy or guarantee, adds liquidity back into the home financing markets, hence increasing the number of loans available and increasing the number of people able to engage in a housing transaction this year.  

This stimulus package means that you may have access to a less expensive loan at a reduced monthly payment.  Previous loan limits kept many people from buying homes in higher priced areas because loans exceeding the $417,000 limit higher “jumbo” loan rates.  With the passage of the stimulus package, people in higher priced areas, like here in

 The Potential ImpactAccording to an economic impact study conducted by the National Association of Realtors® earlier this month, increasing the Freddie Mac and Freddie Mae conforming loan limits may result in as many as 500,000 refinanced loans and could help reduce foreclosures by as many as 210,000. 

In addition, this national real estate organization reported: 

• That over 300,000 home sales could be generated thus reducing housing inventory and home prices could be strengthened by two to three percentage points.
• Nearly half a million people with higher priced jumbo loans may be able to refinance to conforming loans under the provisions of the bill, saving these people approximately $270 to $410 a month, according to NAR estimates.

Advice to Home Buyers and Sellers: Don’t Wait!

• Get pre-qualified for a mortgage, through a reputable mortgage company like Princeton Capital, as soon as possible so that you can make an offer before someone else does.  More people will be out shopping for homes in a higher price range so you want to be prepared.
• If you saw a dream home you couldn’t afford last year, look again. Two trends are moving in the buyer’s favor – the price may have dropped and you may be able to afford a bigger mortgage at a lower interest rate.
• Sellers should not hold back at a time when more buyers are becoming qualified. This program may not continue beyond this year. 
• Timing the market is not possible. While you may have to sell for less than you would have received a year ago, you’ll make it up on the lower purchase price of your next home and lower financing costs.

NAR believes that increasing the loan limits for Fannie Mae and Freddie Mac will bolster the severely stressed housing finance market by immediately infusing much needed liquidity into the nation’s mortgage market. “While such an increase will not solve the full range of housing challenges, it will play a vitally important role in improving the nation’s economy and making the dream of homeownership more attainable for thousands,” said NAR President Richard Gaylord.This truly is an exciting time in real estate.  If you have been sitting on the fence waiting to enter into the housing market, your window of opportunity may have arrived.  Don’t wait until it is too late.  Call me today! 

Joanna SmithColdwell Banker 

*Only high cost areas in California and Hawaii (

**NAR Hails Passage of Economic Stimulus Package to Help Jumpstart Housing Market; available: http://www.realtor.org/press_room/news_releases/2008/nar_hails_passage_of_stimulus_package.html