Fannie Mae, Freddie Mac and FHA loan limits changes due in October-How will this affect the Florida Real Estate Market?

Fannie Mae and Freddie Mac is slated to cut the size of loans they buy from lenders starting Oct 1, 2011 and the Federal Housing Administration (FHA) loan limits will also drop on the same day.    How will this move affect the Florida real estate market? It will mainly affect high-cost home areas.

Fannie Mae and Freddie Mac- According to HUD, Florida currently has six city areas with a maximum loan limit higher than $417,000 for a one-family home: Fort Lauderdale-Pompano Beach-Deerfield Beach (current maximum loan is $423,750), Miami-Miami Beach ($423,750), Bradenton-Sarasota-Venice ($442,500), West Palm Beach-Boca Raton-Boynton Beach ($423,750), Naples-Marco Island ($531,250), and Key West ($729,750).

Of the six, four will drop to the new maximum of $417,000; however, two will not. Effective Oct. 1, the Fannie Mae and Freddie Mac loan maximum for Naples-Marco Island will be $448,500, while Key West-Marathon will be $529,000.

FHA
FHA limits differ by city yet no area in Florida is lower than $271,050 which is 65 percent of the Fannie Mae/Freddie Mac loan limit.    The FHA national loan limit “ceiling” is 150 percent of the national conforming loan limit. In higher-cost areas, the FHA loan limit lowers after Oct. 1, though not necessarily to the floor amount.

In Jacksonville, for example, the current FHA maximum one-family loan limit of $387,500 drops to $304,750; in Miami-Miami Beach-Kendall it drops from the current $423,750 to $345,000; in Key West it goes from today’s $729,750 to $529,000.  The Orlando area (Orange, Seminole, Osceola and Lake Counties) limit will be $274,850.

Still, since many areas  in  Florida already have a $271,050 FHA loan limit – mainly smaller urban areas –buyers in those areas will not notice a difference.

How will your area be affected? You can search the new limits here on the U.S. Department of Housing and Urban Development's searchable database for loan limits, both FHA and Fannie Mae/Freddie Mac.

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