Mortgage limit raised to $523,750 in Boston area
In the Boston area, the limit has been increased to $523,750 for a single-family home, according to the Office of Federal Housing Enterprise Oversight. The previous limit was $417,000. The new limits, which vary by geographic area, are pegged to area's median income.
By raising the limits, Congress hoped to boost the nation's slumping housing market, particularly in high-cost cities such as Boston where a large portion of all home purchases exceeded the prior limit.
Interest rates for jumbo mortgages -- those that exceeded the $417,000 limit -- have surged to near 7 percent during the credit crunch. That is a full percentage point higher than rates for conforming mortgages that fell under the old limit.
The new limit is $670,500 for two-family properties; $810,450 for three-families; and $1,007,200 million for four-unit properties.
(By Kimberly Blanton)