OFHEO keeps conforming loan limit steady for 2008

The maximum 2008 conforming loan limit for single-family mortgages purchased by Fannie Mae and Freddie Mac will remain at the 2007 level, announced the Office of Federal Housing Enterprise Oversight (OFHEO).

The single-family limit can be no higher than $417,000 for one-unit properties in 2008, the same as in both 2007 and in 2006, said OFHEO.

The charters of the two government-sponsored enterprises (GSEs) permit an annual adjustment to the maximum size of mortgage loans Fannie and Freddie may purchase. The maximum adjustment is based on the change in the national single-family home price as determined by the Federal Housing Finance Board (FHFB) from its Monthly Interest Rate Survey (MIRS).

The FHFB reported the decline in the average price was $10,685 or 349 percent-from $306,258 in October 2006 to $295,573 m October 2007. The combined two-year decline is now 3.65 percent, said OFHEO.

OFHEO announced that no decreases in the loan limit would be required for 2008, regardless of the price data in the MIRS report.

"While the house-price survey data used in determining the conforming loan limit show a decline over the past year, as previously announced and consistent with the proposed new conforming loan limit guidance, the level will remain at $417,000 for the third straight year," said OFHEO Director James B. Lockhart.

Based on FHFB's house-price announcement, OFHEO calculated that two-unit mortgages eligible for purchase will be limited to $533,850; three-unit mortgages to $645,300; and four-unit mortgages to $801,950. The 2008 limit for second mortgages is $208,500.

The loan limits for one-to-four-family mortgages in statutorily designated high-cost areas-Alaska, Hawaii, Guam and the U.S. Virgin Islands-will be 50 percent higher, said OFHEO.