California asks for higher conforming loan limits

Last Thursday, the Governor of California, Arnold Schwarzenegger wrote a letter to Congressional leaders for a state exception to the GSE conforming loan limit.

Congress has already been discussing raising conforming loan limits of Fannie Mae and Freddie Mac from their current amount of $417,000. However, Schwarzenegger is asking for a state-specific exception for California. Fannie Mae and Freddie Mac are no foreigners to the concept of state specific exceptions. Currently Alaska, Hawaii, the US Virgin Islands, and Guam al enjoy a conforming loan limit which is 50% higher.

In his letter, Governor Schwarzenegger writes

“The current GSE conforming loan limit for lenders willing to originate conforming mortgage loans for median-priced homes in California is $417,000; however, according to the California Association of Realtors, the median price of a single family residence in July was $586,030. Again, this disparity makes these products practically irrelevant in California.”

Let’s hope Florida Governor Crist writes a similar letter to Congress for Florida