Economic Stimulus Package Implementation

President Bush has signed into law the Economic Stimulus Package that will temporarily increase conforming loan limits in certain high-cost areas through the end of 2008.

Stern Mortgage Company looks forward to quickly implementing the new limits, and making them available to borrowers. The implementation process begins with the GSEs (Fannie Mae, Freddie Mac) and FHA. Once these investors have defined and priced the products, they will be available to the public.

Please note the following:

·         The GSEs and FHA must now determine the actual loan limits. Although they will be based on median housing prices for each Metropolitan Statistical Area (MSA), housing prices are declining, and the "as of" date that will be used has not been announced. Click here to see the National Association of REALTORS most recent list of median sales prices for select metropolitan areas.

·         The GSEs and FHA will need to provide lenders and investors with details about the criteria for loans they will purchase, using the new limits.

·         The higher conforming limits will have no impact in areas where the median housing prices are already below the current conforming limits. Only higher-cost areas where the median housing price is higher than $417,000 for a 1-unit SFR will see an increase. And only high-cost areas (such as most of California) will increase up to the maximum $729,750 limit, based on 125% of the specific MSA.

·         The increased conforming limits are temporary, and are currently expected to end on December 31, 2008.

Stern Mortgage Company is prepared to respond quickly to offer the higher conforming loan amounts as soon as they become available.