Fannie and Freddie Raise Mortgage Limits

Effective January 1, 2002, Fannie Mae and Freddie Mac increased the size of home mortgages that they will buy by 9.3 percent, up to $300,700 from the previous limit of $275,000. In Alaska and Hawaii the limit will increase to $451,050 from $412,599. Real estate brokers in California, New York and Massachusetts lobbied heavily to have the same limits as those two states. Even without the higher limits reserved for Alaska and Hawaii, a consumer willing to make a ten percent down payment will be able to qualify for a home selling for $334,000. The increase in the official level of "conforming mortgages" has revived the complaints of critics who argue that the two government agencies were established to support housing for low-income consumers. In less affluent communities, where the mean price of homes is $150,000, only the most affluent in the community can afford a home selling for $340,000.