Historic Home Blog

Last Friday was a very good day for real estate in the Washington DC area. On Friday, mortgage costs got cheaper in the DC area. The size of loans that can be guaranteed by Freddie Mac and Fannie Mae was raised to $729,750 (up from $417,000) in Montgomery, Frederick, Charles, Prince George’s & Calvert Counties (also DC & much of Northern VA) and raised to $560,000 in most other Maryland Counties.

There is more… Mortgages up to those amounts will now qualify for FHA insurance (up from $362,900).

What does this mean to home buyers & sellers? It is time to buy and sell. With any luck lenders will dust off the old and once unattainable jumbo loans, ease qualifying and lower the interest rate, so buyers, who have been waiting for the best time to buy a house, can get to the business of shrinking this inventory of unsold homes.

http://money.cnn.com/2008/03/06/real_estate/expensive_mortgages_get_cheaper/index.htm

What’s the catch? Well, the purpose of these changes is to stimulate home buying now, so the deal is only good until December 31, 2008. Yep. 9 months. That’s it. After that the unsold houses turn back into pumpkins and home buyers go back to dreaming of home ownership.

Can it get better than this? Yes.

Congress is nearing completion of a bill that would allow the FHA to provide safe loan alternatives to subprime mortgages and make homeownership more accessible.

http://money.cnn.com/2008/03/10/news/economy/fha_reform_upcoming/index.htm

This all bodes well for the DC area spring housing market.