As I wrote about several weeks ago the U.S. Housing and Urban Development (HUD) was in the process of increasing the conforming loan limits. The limits are determined county by county according to a complex formula that takes into account median household incomes and home prices.
Well, hallelujah, we now have the new limits. Orange County was set at $729,750 so, theoretically, borrowers can get preferred interest rates on loans up to this amount. What happens next is where the rubber meets the road: the buyers of these home loans will have to come up with new guidelines for qualifying and lending and all banks must abide by the same guidelines. To date these guidelines have not been disclosed and probably won't be for another 30 to 60 days.
Until then borrowers and banks are dead in the water for these types of loan. Let's keep our fingers crossed that the new interest rates, minimum down payment required, and qualifying criteria will be realistic enough to let all the people who want to buy a home do just that.