Monday, March 3, 2008:  The National Association of Realtors 2008 Conventional Finance and Lending Committee passed the following motion:

" That NAR suppport a permanent national conforming loan limit no less than 50 percent higher than the current conforming loan limit ($625,000 or higher).  In addition, that NAR support making the temporary loan limit increase for high cost areas as porvided in the economic stimulus legislation permanent.  Accordingly, for high cost areas, the conforming loan limit should be increased to 125 percent of the local median home sale price, not to exceed $729,750".

If passed, the greater Chicago metro area (considered a non-high cost area) which currently has a conventional loan limit of  $417,000,  would be increased to $625,000 giving relief to home buyers and sellers who are currently subject to a minimum of a1% higher (unconventional or Jumbo) interest rate for mortgage loans which can greatly pressure affordability and therefore stunts new construction and higher priced existing homes in much of suburban Chicagoland.   

This new NAR policy proposal will be presented to the Senate Banking committee on GSE reform on Thursday, March 6, 2008.  There is hope that Congress’ new willingness to raise conforming loan limits by enacting a temporary increase as part of the economic stimulus lesgislation will drive them to consider this permanent and effective modification to the the legislation.

Dean Rouso, Broker-Owner, Prime Property Partners and Committee Member of NAR Conventional Finance and Lending Committee.