President Obama has signed the $790 billion economic stimulus bill. It includes an expansion of the first-time homebuyer tax credit ($8k, no pay-back) and restores to $729,750 (in the 2008 Stimulus Act) the upper loan limit in high-cost areas for Fannie Mae, Freddie Mac and FHA loan guarantee programs.

Just like last year however, a few things MUST happen before any investor will accept applications with higher loan amounts. Ultimately, the Agencies (Fannie Mae and Freddie Mac) and FHA must determine whether pricing, policy and/or delivery requirements will be changed. In short, I expect the lenders to take about 30 days to try and figure out some scheme to ultimately screw the consumer. If you remember the first time the loan amounts were raised to this level you can understand my skepticism.

Ryan Ogata
Senior Mortgage Consultant