LoanCentral's Real Estate Lending Blog

The loan limits for ‘conforming jumbo’ loans and FHA ‘jumbo’ loans are set to change in October. In 2008, temporary high balance loan limits were set in place through an act of Congress in response to the financial crisis that took away jumbo financing virtually overnight. These temporary loan limits, which currently allow for financing up to $567,500, are set to expire on 10/1/11.

The impact of this will mean that all loan amounts over $417,000 will need to be financed under true jumbo loan programs that carry higher interest rates and more stringent underwriting and down payment guidelines.

This means that people need to plan ahead!!

Loans that are currently in process with loan amounts between $417,000 - $567,500 must close before 9/30/11 (time frames may vary by lender). This impacts both conventional and FHA loans.

If you aren’t able to close before 9/30/11, you will want to make sure to consult your loan officer as to how these changes will impact your qualifications and buying power.

Currently, the conforming jumbo program allows for a 10% down payment and FHA jumbo allows for a 3.5% down payment on loan amounts between $417,000 - $567,500. After October 1st, the jumbo loan programs will require a 20% down payment, and FHA loans will only be allowable up to a loan amount of $417,000.

If you act quickly, there is still time to get a loan with these great programs!!!