SHERMAN ADDRESSES HOMEBUYER’S FAIR
Washington, D.C. - Congressman Brad Sherman (D-Sherman Oaks) addressed the Federal Home Loan Bank of San Francisco/Southern California Association of Realtors Homebuyers Fair. Congressman Sherman highlighted his work in Washington on raising the Conforming Loan rate --- the limit on the size of loans that Fannie Mae and Freddie Mac can buy in --- in high-cost areas like the San Fernando Valley.
œOwning a home is something every family aspires to. As a member of the Financial Services Committee, I have worked continuously in Washington to make that opportunity possible for more Valley residents, Sherman said. œIncreasing the conforming loan limit will help homebuyers in the Los Angeles area at no cost to the taxpayer. If local banks can sell the loans they extend to Fannie Mae and Freddie Mac, the interest rates on those loans will be roughly Â¼ percent lower than loans their institutions can currently purchase. This will result in savings of thousands of dollars for Los Angeles homebuyers who borrow $500,000 or more to buy a home.
œThe Los Angeles areas current median home price is $477,300, up from $423,500 a year ago. I supported raising the conforming loan limit in designated high-cost areas to either the median home price of that area or 150% of the current limit. So the conforming loan limit in Los Angeles would be raised to $477,300, up from the current $359,650, Sherman continued.
œFannie Mae and Freddie Mac are supposed to help average families buy homes, but they cannot currently help anyone with a home loan over $359,650. Many modest homes in the San Fernando Valley, and around the Los Angeles area, sell for well over that amount. With this legislation those two entities can finance mortgages in Los Angeles up to $509,230, Sherman explained.
Shermans comments referred to the Federal Housing Finance Reform Act of 2005 (H.R. 1461), which recently passed the House Financial Services Committee and is expected to be considered by the full House in June.