Cap may make it harder to obtain mortgage
The cap on single-family home loans in San Diego County that can be purchased by government-sponsored Fannie Mae and Freddie Mac will be reduced in January from $697,500 to $546,250.
In a move that’s expected to make it harder for some consumers to get mortgages, the Federal Housing Finance Agency announced yesterday that it is replacing temporary caps that expire on Dec. 31.
Consumers who take out loans greater than the “conforming limit” typically pay higher interest rates. And they may have trouble getting a loan at all, because the two mortgage giants have become the main source of home-loan funding since the collapse of the nation’s subprime lending market last summer.
Lowering the limit is expected to place downward pressure on home prices, which have declined sharply since the median home price here peaked at $517,500 in November 2005. The median in September was $328,000, down nearly 37 percent from the peak, according to the MDA DataQuick research firm.