Lower Loan Limits and a Higher 20% Minimum Down Payment?

Without an extension or permanent change enacted by Congress, loan limits will decrease from $729,750 to $625,500.  Couple that with new demands for a minimum 20% down payment for conventional loans and strict debt-to-income ratios, and there could be a very sad situation.

In many states these changes may not change too many people's lives.  But in California where the market has for years been higher than other areas of the country, those changes could be critical, decreasing ability of buyers and sellers to purchase and sell, and hurting the recovery of our market. There are 27 California members of Congress who have spoken out against these changes. Everyone should know how their homebuying or homeselling future could be impacted by these changes, and possibly be shut out of the market.

And to make matters more confusing, there have been alternate proposals, and different ideas of what defines a Qualified Residential Mortgage, meaning those mortgages that could be exempt from the new rules. While it may have started with good intentions, these new rules, if passed into law, could have unintended, unknown effects.

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