CA Assoc. of Realtors reported last week that Pres. Obama was expected to sign an extension through 2010 to the current loan limits for Fannie Mae, Freddie Mac, and FHA, which are set to expire at the end of 2009. These loan limits are set at 125% of local median home sale prices, up to a maximum of $729, 750, in high cost areas, such as CA. These higher loan limits allow buyers to purchase homes that would otherwise be beyond their means.
There is also hope that Congress may extend the $8000 First Time Home Buyer Tax Credit beyond its current November 30 expiration date. This credit has encouraged first time home purchases and has contributed to the strengthening of the residential real estate market and the stabilization of prices. In a C.A.R. survey, 40% of first-time home buyers reported that they would not have made their home purchase were it not for the tax credit.
These incentives to home purchase, along with low interest rates and lower prices, make this a good time to consider home purchases, especially for first- time buyers.