New Loan Limits Impact The Middle Class

The vast majority of borrowers, 86%, who used a loan above the new conforming limits prior to October 1st, had a household income below $150,000.

Palm Coast, FL – November 11, 2011

• To attain a better understanding of the borrowers impacted by the reduction of the conforming loan limits in high cost areas, NAR Research looked at FHA purchase originations data reported for the portion of 2011 prior to the change in the loan limits (e.g. January 1st through September 30th).
• Data from FHA’s Single Family Snapshot (loan amount, product type, and contract rate) were coupled with assumptions about the amortization period, debt-to-income ratio as well as insurance and taxes (30 years, 28%, and 1.5%, respectively) to estimate the household incomes of affected borrowers.
• The vast majority of borrowers, 86%, who used a loan above the new conforming limits prior to October 1st, had a household income below $150,000.
• To read the complete new “Impact of New Conforming Loan Limits” survey, click here >

 Source: National Association of Realtors®