Link Between COVID-19 & Mortgage Loans
As the COVID-19 shelter-in-place directive is impacting all areas in our society and the global society at large, the effects are being felt in the mortgage markets as well. Mortgage interest rates that fell to the 50-year low in the last week of February and the first week in March, have since increased and then started falling again in the last week (ending April 10th).
Reductions in Conforming Loans
This more recent rate reduction applies to conforming loan products only.
Conforming mortgage loans are those that meet the loan limits and underwriting guidelines for mortgages being sold to Fannie Mae and Freddie Mac.
The standard conforming loan limits nationwide now are:
- single unit residential properties (Single Family Detached Residences, Condominiums, and Townhouses) – $510,400
- two-unit properties – $653,550
- three-unit properties – $789,950
- four-unit properties – $981,700.
Mortgage loans that fall within the standard conforming loan limits and guidelines are thus seeing fixed interest rates head back towards the 50-year low levels again, as we gain some distance from the massive market volatility of six weeks ago.
Increases in High Balance Conforming Loans
In 2008, the markets were reeling from what became known as the beginning of the Great Recession. At that time, Congress authorized a temporary increase of the conforming loan limits — part of the 2008 economic stimulus package. This “Temporary High Balance Conforming” category still exists today.
The high balance conforming loan limits current