It's now been over 3 years since the federal government increased maximum loan limits which afforded home buyers in real estate markets like San Diego the opportunity to purchase more expensive homes for lower down payments, lower interest rates and with fewer underwriting restrictions. This will all come to and end this Saturday, September 30th when the government sets loan limits back to 2008 levels.
Maximum loan limits are based on a sliding scale depending on local home prices. San Diego real estate has some of the highest priced homes in America and therefore borrowers could get a loan up to $729,750 before they had to shop for a jumbo loan. With the "old" loan limits back in play, now the maximum a borrower can get a loan for before it becomes a jumbo is $629,500.
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Real estate agents across the country have feared that this reduction will cause more issues in an already challenging real estate market such as downward pressure on prices of more expensive San Diego homes. Fewer people will be able to qualify for a loan or even afford the higher down payment and mortgage payment.
How do you think this will impact the real estate industry, if at all?