What new loan limits mean for O.C. borrowers, vets


December starts out with a stocking stuffer from Uncle Sam!

The Federal Housing Finance Agency or FHFA raised the conventional conforming maximum loan limit for 2017 by $7,100, going from its current $417,000 to $424,100.

At least one lender announced it would fund on the new Fannie Mae and Freddie Mac loan limit immediately.

A second bucket of government love comes in the continuum of the so-called agency jumbo or agency high-balance loan limit that the O.C. has enjoyed since 2009. The high-balance loan limit goes up by $10,650, from its current $625,500 to $636,150.

Agency jumbo rates tend to be about one-quarter percent higher than standard conforming rates.

Considering that CoreLogic just announced that the median O.C. home price tied a record high of $655,000 in October, every little bit helps.

Conventional loan amounts for duplexes, tri-plexes and quadra-plexes go even higher in 2017 in the O.C.: For two units, the new limit is $814,500, for three units, it’s $984,525, and for four units it’s $1,223,475.

Congress passed the 2008 Economic Stimulus Act and the Housing Economic Recovery Act creating designated high-cost areas. From Jan. 1, 2009, to Sept. 30, 2011, the O.C. enjoyed a high-balance loan limit of $729,750. On Oct. 1, 2011, the high-balance loan limit was decreased to $625,500.

Up we go again!

The VA’s 2017 maximum effective loan amount for eligible veterans and active duty members of the military will be the same as conventional limits on a zero-down payment loan, according to a VA spokesperson.

Once you go over $636,150, at least one lender I know of will do VA loans up to $2,000,000 in the O.C. But not zero down. The borrower has to provide a formulated percentage of a down payment.

The FHA has not yet announced loan limits for 2017. At least for Orange County, the maximum loan limits do coincide with Fannie and Freddie loan limits.

Unlike designated high-cost areas like Orange and Los Angeles counties, Riverside and San Bernardino counties have conforming only loan limits of $424,100 for one unit, $543,000 for two units, $656,350 for three units and $815,650 for four units.

And FHA limits are even lower, starting at $356,500 for one unit.

What if the Inland Empire is your real estate empire hot spot, and you think the maximum loan limits are wrong?

Anybody can appeal, requesting a change to the FHA loan limit, which is a precursor to the conventional loan limit change consideration. The appeal needs to be in to the Santa Ana Homeownership Center by Jan. 3.

Given the increased loan limits and climbing interest rates, I’m going to give you some out-of-the-box ideas next weekabout making your purchase or refinance more affordable.

If you have questions or comments, please contact Jeff Lazerson by clicking here.

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Jeff Lazerson - Mortgage Columnist since 2011