Fannie, Freddie to back home loans up to $636,150 as market recovers

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Washington Examiner:

Fannie Mae and Freddie Mac will back home loans up to $636,150 in high-cost areas next year, the bailed-out companies' regulator announced Wednesday, a move that reflects rising home prices across the country.

 

The two government-sponsored enterprises currently guarantee loans up to $625,500 in expensive areas.

 

The mortgage giants' regulator, the Federal Housing Finance Agency, reported data on Wednesday that confirmed that average house prices have risen above the level they reached in the third quarter of 2007, which was when housing prices began the free-fall that would result in the financial crisis.

 

With housing prices finally higher, the agency raised the cut-off for loans it will allow Fannie and Freddie to back. Now, they will buy loans up to $424,100 in most areas of the country, an increase from $417,000 in past years. In high-cost areas — mostly along the East Coast and California — the limit goes up to $636,150.