May 6th
Uncategorized

Mortgage Changes Effect High-Cost Areas…so what comes next for SF?

On October 1, 2011, the government will begin to dial back on the size of mortgages it guarantees in high-cost areas like San Francisco, New York, and Washington D.C. Once that happens the maximum loan amount that Fannie Mae and Freddie Mac will back is scheduled to drop from $729,750 to $625,500. That will likely […]


On October 1, 2011, the government will begin to dial back on the size of mortgages it guarantees in high-cost areas like San Francisco, New York, and Washington D.C.

Once that happens the maximum loan amount that Fannie Mae and Freddie Mac will back is scheduled to drop from $729,750 to $625,500. That will likely make mortgages more expensive and/or harder to obtain for those buyers shopping in the $700K range, who prefer a down payment of 10 percent or less. In a city like San Francisco, where many single-family homes are priced well over $700K, means that buyers will need more cash to avoid the extra costs of jumbo loans over $625K.

The curbs on government-backed loans could reduce the available pool of buyers. For people planning on exiting the market altogether—such as retirees—they may have to sell at a lower price, be patient to get the price they want, or consider owner financing.

When loans are rolled back, buyers will need to have a larger cash down payment unless they’re willing to buy a less expensive home. We will have to wait and see whether sellers will reduce the price of their homes to make them more attractive.

Would you like to try CleanOffer? Help in your search or selling your home? If so, please e-mail me at callingcarole@gmail.com or call my cell 415.608.1267. Find me on Facebook at San Francisco City Living and stay up to speed with the best of the city.


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