The FHA announces the yearly limit for loans every year. Only those loans which are under the set limit qualify to be bought by Freddie Mac and Fannie Mae – i.e. “conforming” mortgage loans. The main advantage of these loans is the lower interest rate (thanks to the lower risk which the lender has to assume). Unfortunately the conforming mortgage loan limit for Massachusetts in the year 2012 remains the same as in the year 2011.
image by wikipedia
Conforming Mortgage Loan Limit for Massachusetts in 2012
Barnstable, Berkshire, Franklin, Hampden, Hampshire, and Worcester: Considered low cost areas, the limit set for a single unit property is $4,17,000, for a double unit the limit is $5,33,850, the triple unit limit is 6,45,300, and the four unit limit is $8,01,950.
Essex, Middlesex, Norfolk, Plymouth, and Suffolk: Considered mid-costly areas, the loan limits are higher than low cost areas by a small amount. The limit for a one unit property is $4,65,750, for a two unit is $5,96,250, for a three unit is $7,20,700, and for a four unit is $8,95,700.
Nantucket and Dukes: Considered high cost areas, the loan limit is much higher because of the higher costs of real estate in these areas. The loan limit for a one unit property is $6,25,500, the limit for a two unit is $8,00,775, for a three unit is $9,67,950, and the limit for a four unit property is set at $12,02,925.
Analysis of the Loan Limits:
The average mortgage loan limits for most of the counties in Massachusetts have been left unchanged in the year 2012. In early 2011 the loan limit was $5,23,750 but this was dropped to $4,17,000 in mid 2011. The same limits apply for this year (Up to December 2012).
So if you are planning on purchasing a house, now is as good a time as ever, and you shouldn’t let conforming limits concern you. Experts estimate that the mortgage loan limits for Massachusetts will mostly remain unchanged next year as well. Even if increased, the amount will likely be very small, so holding off a house now will only see interest rates go up without significantly affecting loan limits. The real estate market as a whole is expected to revive itself and start to grow from mid 2012. So it is probably better to start investing now, instead of waiting for 2013.
Lender Tip: Unlike some loan officers, Phil Ganz offers both conforming and non-conforming loans. So contact us if you need to borrow a higher amount than the limit set by the government.