2013: Good Year for Mortgages

The loan limits for single-family home mortgages were announced on Nov. 29. For the Washington metropolitan
area, loan limits for Fannie Mae and Freddie Mac backed mortgage loans remain unchanged.

In most of the country, the loan limit will be $417,000 for one-unit properties. The loan limits are established under the terms of the Housing and Economic Recovery Act of 2008 (HERA), and are calculated each year. The limits for most
selected high-cost areas remains at $625,500.

The Washington, DC, metropolitan area is designated as one of the high-cost areas in the contiguous United States where mortgage loan limits are $625,500 for one-unit properties.

The areas in our region that qualify for the high-cost loan limits include Washington, D.C., Arlington, Va., Alexandria, Va. (metro- politan area) along with counties in Maryland — Calvert, Charles, Frederick, Montgomery, Prince George’s — and in Virginia — Arlington, Clarke, Fairfax, Fauquier, Loudoun, Prince William, Spotsylvania, Stafford and Warren. In Virginia, the cities of Alexandria, Fairfax, Falls Church, Fredericksburg, Manassas and
Manassas Park also qualify.

In these areas, the limits are: 1-unit; $625,500; 2-unit, $800,775; 3-unit, $967,950; 4-unit, $1,202,925.

For FHA loans, the loan limits for 2013 will be the same as those for conventional loans. The new limit will be $625,500 reduced from $729,750, the 2012 limit. FHA loans enable a homebuyer to buy a property with as little as a 3.5-percent down payment and unlimited gift money from family members. There are no income limits for those desiring FHA loans.

Housing in the Washington, D.C., metro- politan area appears to be stabilizing. Mortgage interest rates as of the end of November were near historic lows. According to the Freddie Mac survey of purchase money mortgage rates, the rate for 30-year fixed rate money was 3.32 percent and for 15-year fixed rate money was 2.64 percent — both with just under one point in discount fees.

The economy is moving forward at a steady, slow pace. The prospects of the fiscal cliff still looms, House Speaker John Boehner still says he “doesn’t want to go over the cliff” but will do “whatever it takes to deal with the debt prob- lem.” If no deal is done, rates may go lower. If severe austerity programs are invoked, the economy is likely to slow which means rates would not rise. There are no catalysts on the horizon for higher mortgage rates. 2013 should be a good year for mortgages

Bill Starrels lives in Georgetown and is a mortgage loan officer. He can be reached at 703- 625-7355 or bill.starrels@gmail.com.

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