For the first time since 2006-the Federal Housing Finance Agency (FHFA) has increased the base conforming loan limit for conventional mortgages for single family homes. Specifically, effective Jan. 1, 2017 (for loans acquired in 2017) conforming loan limits will change from $417K to $424,100 and Jumbo Conforming from $523,250 to $598K. Locally, this applies to certain counties including, Middlesex, Norfolk, Suffolk, Plymouth and Essex, among others. Here is a link to maximum conforming loan limits for all counties locally and nationwide.
The Conforming Loan Limit refers to the size of the mortgage that Fannie Mae and Freddie Mac will purchase and/or guarantee. Effectively, this has increased the loan balance they are permitted to buy.
This increase in loan limits is a help to first time home buyers and lower income buyers in a higher priced market like ours. Specifically, it expands the scope of loans eleigible for Fannie and Freddie guidelines thus simplifying the qualification process. Secondly, it increases the allowable purchase price with a 5% down payment up to $630K in designated counties, if eligible.
If you have any questions, please feel free to reply to this email.
In other news:
Effective Dec. 1 there was a change to the Smoke Detector regulations: The new regulation requires smoke alarms to be photoelectric or a combination of photoelectric and ionization with a hush button. These newer models come with a sealed 10 year battery that does not require replacing. Rather, it sends an alert when the unit itself is expiring at which time it can be replaced. The new regulation addresses the deterioration of the sensing technology after ten years. To comply, smoke detectors over ten years old must be replaced, and any detector without an expiration date must automatically be replaced. If you are selling a single or two-family home, be sure that the smoke detectors are up to date and working.