Residential Home Loan Centers

Increased Federal Loan Limits Lower Price Tag on Hundreds of Thousands of Loans

Mortgage Planners can Help Potential Homeowners Reduce Monthly Payments by Choosing the Correct Federally-backed Loan Product While the Temporary Increase is in Effect


Baltimore, MD -- (ReleaseWire) -- 03/10/2008 -- One immediate benefit of The Economic Stimulus Act of 2008 is the increase in loan limits for high-cost areas of the country. By raising the Federal Housing Administration’s loan limits on what qualifies for lower-cost FHA, Fannie Mae and Freddie Mac loans, the bill could help a quarter of a million families purchase or refinance their homes at a lower cost. Combined with record low interest rates, the change could improve the financial picture for many now facing foreclosure. The options and loan ceilings vary, however, from county to county and only a Certified Mortgage Planner can weigh all the options to determine if a new loan makes sense for an individual homeowner.

“This is a wonderful opportunity for those now paying a premium to live in high-cost states to lower their payments by switching from what was considered a subprime or jumbo loan to a federally-guaranteed loan at today’s low rates,” states Robert Schiller and Justin Freeman, Branch Managers with Residential Home Loan Centers, a mortgage brokerage company based in Baltimore, MD. “The right loan product can go a long way toward maximizing equity position while minimizing risk.”

HUD Secretary Alphonso Jackson was optimistic about the number of people who would benefit from the temporary increase. "The stimulus is providing immediate relief to homeowners," Jackson said. "It raises the Federal Housing Administration's loan limits, enabling more families to qualify for a safe, affordable FHA mortgage. This is important. Families in high-cost states have been priced out of FHA-backed loans. This has created a vacuum, filled by exotic subprime loans. Families with home loans up to $729,750 will now qualify for an FHA loan, depending on where they live."

FHA loan limits that will range from $271,050 to $729,750 with the largest loans available in high-cost metropolitan areas such as New York, Los Angeles, San Francisco and Washington, D.C. But even smaller markets could see increased activity in the housing market when the new loans become available.

Schiller predicted the new rules would allow thousands of local families to access equity in their homes and make homeownership a reality for thousands more. “This is good news for people who were otherwise paying a penalty for living in areas where median priced homes required jumbo loans with higher fees,” Schiller stated.

Regardless of the market, however, there is no universal optimal choice of mortgage product and potential borrowers are advised to contact a knowledgeable and reputable mortgage professional who can evaluate their current financial situation, consider their goals and capabilities, and take these factors into account when advising about potential mortgage options. “I take numerous factors into account when evaluating a borrower’s fit for a specific type of loan,” says Freeman. “There are far more factors than monthly payment and interest rates. I always consider the borrower’s spending habits, capacity to save, risk tolerance and future goals. A good loan choice is the one that works best for the specific borrower. Suitability is absolutely critical for the deal to make sense.”

Robert Schiller and Justin Freeman can be reached at, by going to or by calling 410-580-1122.