My Real Estate Blog

In what's at least a year-long reprieve from some higher housing costs, President Obama recently signed legislation that comes with a provision to extend the current high-cost-area conforming loan limit through 2011.

The provision means homebuyers and homeowners in expensive housing markets will continue to get a break on interest rates when they buy or refinance. Conforming loans come with cheaper rates than non-conforming or "jumbo loans", because they are backed by the government.

Federal lawmakers recently voted to keep the maximum size of loans guaranteed by Fannie Mae and Freddie Mac and the Federal Housing Administration, for high-cost areas, at the current $729,750 level.  The limit applies to areas that include Washington DC, California, and New York. The limit for most of the country is $417,000.