Tips for Buyers
2008 Cheaper Mortgages for Summit County Dream Homes
By The Walsh Group

If you’ve been stumped in your attempts to pick up a second home in the Keystone CO real estate market, try again.  The recent economic stimulus package increased the loan limits for government sponsored enterprises (GSEs) up to $729,750 for properties in Summit County, Colorado. 

The former loan-size limit for Fannie Mae and Freddie Mac topped out at $417,000 while FHA loans for a one-unit, single family home in Summit County in the last couple of years increased from $327,750 to $362,790 and now to the gracious figure of $729,750—offering boomers doable financing for dream homes.  The new GSE-loan limits reflect the rising prices for homes in Keystone and Summit County, and are perched at about 125% of the current median home prices. 

Actually, these loans are also available for purchases of real estate in Breckenridge, Dillon, and the entire Silverthorne Micropolitan Area that originated last year after July 1, 2007 and through December 31, 2008.  During this year, home buyers in Keystone and Summit County will find more affordable financing options, lower housing prices, and historically low interest rates. 

In the recent past, even if a purchaser has been well qualified from the standpoint of income and credit, they are frequently halted by the size of the down payment required for conventional loans.  The FHA program requires less of a down payment and affords more consumers the opportunity to purchase a more expensive property.

The line of thought behind the stimulus package is to jumpstart the housing market while assisting many families to build wealth through homeownership.  Homeownership also strengthens communities, allows for civic responsibility, and gives people a stake in their communities.  The National Association of Realtors estimates that increasing FHA loan limits could assist 138,000 Americans to enter the housing market.  Another 200,000 homeowners will have the opportunity to refinance.  Increasing the GSEs loan limits could lead to as many as 500,000 refinanced loans and reduce foreclosures by 210,000. 

Research shows that over 300,000 additional home sales could occur, reducing the housing inventory and strengthening the housing market.  Increasing Fannie Mae and Freddie Mac will hopefully improve the overall liquidity of the mortgage market.

FHA and GSE loans are important to the housing market because they are insured by the U.S. Department of Housing and Urban Development (HUD).  They are popular for first-time home buyers because they all a down payment as low as three percent of the purchase price.  Additionally, most of the closing costs and fees can be included in the loan.

With a mission to expand affordable housing, Fannie Mae operates in the nation’s secondary mortgage market to ensure that mortgage bankers and lenders have enough funds to lend to home buyers at low rates.  Then there is Freddie Mac which purchases, secures and invests in home mortgages with the purpose of providing homeowners and renters with lower housing costs and better access to home financing.

Real property is one of the best long-term investments available.  This is definitely the year of opportunity in our resort area.