If your current home–or the home you are buying–is in a designated “high-cost” area, keep an eye on your calendar. Effective October 1, 2011, the temporary conforming loan limits for your area will expire.
This may be old news for some – the Wall Street Journal reported on this back in February – but just in case you missed the memo, this will affect our San Diego market.
The conforming loan limit for a single-unit purchase has been $417,000 for years. For loan amounts above that, or “jumbo” loans, we have enjoyed two tiers of loans and accompanying rates – “jumbo conforming” and pure jumbos. The “jumbo conforming” loan limit currently stands at up to $729,750 in “high cost” areas. San Diego, being one of those guys, has a current jumbo conforming limit of $697,500.
Come October, the new “jumbo conforming” floor is set to adjust to $625,000; our San Diego limit will presumably be lower. What that means, of course, is that your mid-sixes loan will cost you more. Or, what it might really mean is that your home priced in the mid-eights today will be worth less.