The Economic Stimulus Act of 2008, signed into law on February 13, 2008, establishes temporary increases to Fannie Mae’s conventional loan limits.  This increase in limits has created the new “jumbo-conforming” mortgage loan.

Eligible Loans:

- Loans must be first lien mortgages only.

- Loans must have been originated (based on date of mortgage note) on or after March 1, 2008 up to and including December 31, 2008.

Property Type

- One -unit property on an individual lot of in a codo or PUD

- Principal residence, second home and investment property occupancy are permitted for purchases and limited cash-put refinances.

Principal Residence

- Purchase max LTV on Fixed 90%, max LTV onARM 80%

- Refinance max LTV on Fixed and ARM 75% (rate and term only, no cash out)

Second Home and Investment Property

- Purchase - max LTV on Fixed and ARM 60%

- Refinance - max LTV onFixed &ARM 60% (rate and term only, no cash out)

Eligible Products:

- Fixed 30 year and 15 year term, 5/1 ARM fully amortizing 5/1 ARM IO.

Fannie Mae will provide live pricing options based on the following schedule:

- Fixed 30 year and Fixed 15 year - 4/1/08

- 5/1 Libor Arm, fully amortizing       5/1/08

5/1 Libor ARM I/O                               5/1/08

Loan Limits by County

San Mateo          $729,750

Santa Clara         $729,750

Sacramento         $580,000

Alameda               $729,750

San Diego              $697,500

San Francisco        $729,750

Appraisals

As a result of investigations into fraudulent appraisal practices, FNMA/FHLMC are likely to implement some changes into appraisal practices.  They will be scrutinizing appraisals in greater detail and will be instituting a clearinghouse of appraiser information, conduct and activity.  Value will be looked at intensively so appraisals need to be clean and solid.