2/13/08 Economic Stimulus Bill Signed in by the President.

As of today the Economic Stimulus bill was signed into law by the President. We would like to let you know what to expect.

Several steps listed below, must occur before anyone can lock in loan applications with the
higher loan amounts.

• First, the GSEs and FHA must assess their internal impacts to determine the delivery approach they will require of mortgage lenders and investors.

• Second, GSEs and FHA must communicate their requirements to mortgage lenders and investors.

• Third, Lenders will work to identify impacts and implement the changes as quickly as possible.

Due to these necessary steps, the higher limits offered by GSEs and FHA as a result of this bill will not be immediately available to our clients (higher loan limits are still available through non-conforming product offerings.)

High-level Details of the Stimulus Package

Details of the GSA/FHA requirements are not finalized; however, outlined below is some information regarding what is expected as a result of the new law:

Overall

• The increases are a temporary solution for some high-cost areas based on Metropolitan Statistical Areas (MSAs).

• The Higher loan limits will not be immediately available.

• Changes related to FHA Modernization were not included in the Economic Stimulus Package.
GSE Loan Limits

• Loan amounts may be as high as $729,750; however, $729,750 will not be the nationwide loan limit.

Increases will be available in high-cost areas based on the median area sales prices and will follow the standard HUD mortgage loan limit calculation process.

• To determine high-cost areas, the calculation factor will increase to 125% of the area median sales price.

• The temporary increase applies to loans originated from July 1, 2007, through Dec.31,2008.


FHA

• Loan limits in high-cost areas may increase to as much as $729,750..

• To determine high-cost areas, the calculation factor will increase from 95% to 125% of the area median sales price.

• The increase applies to loans with credit approval issued prior to Dec. 31, 2008.

• Floor will increase to $271,050.

2/13/08 Stimulus Bill to be Signed Today!!

A message from CAMB Government Affairs Chair Ed Smith, Jr.
regarding the Economic Stimulus bill.

President Bush to sign the Economic Stimulus bill Today!

On Thursday of last week, as CAMB members lobbied the halls of the congressional offices in Washington, D.C., the U.S. Senate and House of Representatives passed a final version of the Economic Stimulus bill that includes provisions to increase the FHA and GSE conforming loan limits. Essentially, the loan limit would be 125 percent of the area median home price, but in no case will exceed 175 percent of the conforming loan limitation for 2008 ($729,750). The bill gives HUD 30 days from enactment to set the loan limit by area. An analysis of how the increase will work for the GSE and FHA loan limit is attached below.

Attached Analysis