Is This New Stimulus Package Going To Help The Bay Area???

August 4, 2008 · Lee Ginsburg

YES! YES! YES! It may not be as immediate as we would like but it will. The two major provisions that I see as beneficial to specifically the Bay Area Are:

The increase in the conforming loan limit to $625,500 permanently and the ability of Freddie Mac and Fannie Mae to borrow if necessary from the U.S. Treasury.

The increase in conforming loan limits has no immediate effect since the emergency stimulus package temporarily increased the limit to $729,750. That terminates Dec. 31 of this year so the new permanent increase is a major long term bonus. Bay Area Realtors and politicians have been asking for this for a long time. Higher would of course been better but $625,500 is helpful. When the temporary increase went into affect the banks actually created a third interest rate level of loans called super conforming. This should be bringing us back to 2 levels; conforming and jumbo. Another Big Bonus!

I believe the ability of Freddie Mac and Fannie Mae to borrow from the U.S. Treasury carries a big needed vote of confidence to the mortgage market and will add to stability.

I will discuss my opinions of the other provisions later.

Check out

http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2008/07/31/MN22121BPS.DTL

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2008/07/31/MND71225R4.DTL&hw=James+Temple&sn=002&sc=624

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Filed Under F A Q, Real Estate Finance, Real Estate for Buyers and Sellers, Real Estate in the News, Real Estate on the Web