New Housing Law Bails out Borrowers and Lenders

President Bush signed the bill yesterday designed to secure FannieMae and FreddieMac, the two mortgage giants who have been instrumental in packaging and guaranteeing loans so that they can be sold on the secondary market.  The bill will allow several hundred thousand homeowners to refinance their loans so that they are more affordable and hopefully avoid foreclosure.

The piece that will help San Francisco buyers the most (and I believe that this will work for those who are refinancing properties as well), is the provision in the law that will allow up to $625,000 to be considered conforming and therefore be eligible for the lowest rates (v. the current $417,000).  The New York Times has complete details.

I am hoping that this bill will improve the confidence of lenders so that they are still willing to lend to qualified buyers in San Francisco--those with incomes, great credit and reasonable down-payments and do so at reasonable rates.  While San Francisco is still a very strong market and in many neighborhoods, prices have remained steady, I have noticed that a few of my clients who hope to buy are finding that rates on loans are just a bit more expensive (and so they qualify for a little less).