WASHINGTON – Fannie Mae and Freddie Mac began Friday to buy so-called jumbo mortgages, those over the conforming $417,000 loan limit, as part of the economic stimulus package approved by Congress last month.
The temporary powers are aimed at easing up tight credit in the secondary mortgage market, especially for jumbo loans and will allow the two companies to buy loans up to $729,700 in some markets, based on the national housing index. The changes expire at year-end.
Counties in which mortgages are eligible to the highest of the new limits are primarily located in California, Colorado, Hawaii, Maryland, New Jersey, New York, Virginia and Washington, D.C. The new limits are a function of median home prices estimated by the Department of Housing and Urban Development. The newly increased limits range from $417,500 in Greeley, Colorado to the highest of $793,750 in Honolulu, Hawaii.
