Changes to the Federal Mortgage Loan Programs

Obtaining a loan may become more difficult in the coming months, as new regulations and restrictions are put into place that require more money down and stricter criteria to qualify for a mortgage or other personal loans. This is bad news for individuals who were hoping to take advantage of the historically low mortgage loan interest rates along with federally funded loan options that were requiring little to no cash down when purchasing real estate.

New Requirements
One specific restriction is a ceiling on how much the property can cost when utilizing Fannie Mae or Freddie Mac-backed loans, which can severely limit what can be purchased when shopping in pricier housing areas such as California and New York. However, FHA loans did allow an increase, which was a relief to real estate agents in those areas. The original limit had dropped from $729,750 to $625,500 which had resulted in a drop of more than 71 percent of homes sold within this price range in southern California.

Federal Government Involvement
President Obama has made it clear that his administration plans to get out of the mortgage lending side of business, but it is difficult when so many loans are being obtained through federally-funded programs.

Changes in Other Places
These changes to the loan ceilings also applied to moderately priced markets, such as Hartford, Seattle, and Portland. FHA mortgage loans are usually easier to get when struggling with bad credit or other financial problems but have more requirements as far as the appraisal process and several steps during the escrow. This change has been extended through 2013, but many first-time home buyers with limited cash are surprised by the changes. Typically FHA loans are designed for such individuals who are unable to put a lot of money down but want to take advantage of the low mortgage rates. Most first time buyers are not in the market for such expensive homes, so this has expanded the market of individuals who will be able to utilize FHA loans for real estate purchases.

Personal Loans
Those who are battling financial struggles have options as well, such as bad credit installment loans from GreatPlainsLending.com. This company provides personal loans for emergency cash to pay off a sudden bill or expense that simply cannot wait for the next paycheck. Obtaining a loan is a simple process and can be a huge relief for those struggling with the stress of costly expenses.

When to Purchase Real Estate
The economy dictates the interest rates and other factors when borrowing money, so many people are able to secure excellent rates for their home loans. Changes to the restrictions can be good or bad, depending on which side of the market you might be on. Choosing to purchase real estate can often be a great investment, but those who are not in the position to pay the monthly mortgage payment may want to avoid getting into more financial debt.