HIGHER LOAN LIMIT WILL HELP HOME BUYERS, BROKERS, LENDERS
December, 2000 By Jim Woodard Buyers seeking more expensive homes recently had a break from Fannie Mae, the nation's largest source of financing for home mortgages. This organization (Federal National Mortgage Association) increased its single-family mortgage loan limit to $275,000 for next year. This will allow about 153,000 more families to take advantage of the savings provided by having a Fannie Mae mortgage, according to a report from this group. For example, at the current spread between rates for a Fannie Mae mortgage and a jumbo mortgage, these homebuyers would save up to $24,600 over the life of a 30-year mortgage, the report stated. Loan limits for multi-unit properties will also increase next year. Two-family loans will increase to $351,950; three-family loans to $425,400; and four-family loans to $528,700. Fannie Mae is working to shrink the "homeownership gaps" through a $2 trillion "American Dream Commitment" to increase homeownership rates and serve 18 million targeted families by the end of the decade, the Fannie Mae report explained. Since 1968, the organization has provided $2.9 trillion of mortgage financing for over 35 million families. The increased mortgage loan limit will be particularly helpful to families in areas where home prices are exceptionally high - most notably coastal markets. Gary Thomas, president of the California Association of Realtors, made this comment: "The mortgage loan limit increase will permit an additional 18,500 California families to take advantage of these favorable loans. Fannie Mae's action more accurately reflects the cost of housing in our state. Here, the median price of a single-family home is about $252,510. And in some regions of the state the median price is significantly higher." * * * Selling homes and commercial properties at auctions is becoming an increasingly popular method of marketing real estate. Mortgage lenders are taking note of this growing trend, and many are targeting this emerging market. With the rapid growth of online auctions on web sites, new doors of opportunity are opening to real estate marketing professionals. "Some properties sell better at auction than by conventional means, and the tendency to sell this route is growing in today's electronic age," said David Gilmore, a Realtor speaker at the annual convention of the National Association of Realtors. "Auction selling of real estate brought in $49 billion in 1998. That's up nearly 20 percent from two years previous. For sellers, auctions mean immediate cash and no long-term carrying costs. For buyers, auctions offer both excitement and bargains," Gilmore said. "In fact, the growing trend to use auctions to sell properties may be even more accentuated in the case of commercial real estate." Another Realtor, Kim Hagen, noted the increase in popularity of selling commercial properties by auctions can be largely attributed to the electronic technology and the Internet. "The latest figures we have available, for the first half of last year, show more than $20 million worth of real estate was sold via online auction sales. "Successful auctions, whether online or not, require well-informed buyers, strong publicity, an adequate viewing period and a full explanation of the sale terms," Hagen noted. "Properties that are unique or difficult to appraise are particularly good candidates for auctions." Age demographics have a significant impact on the growing popularity of auctions as a real estate marketing method, according to Stephen Martin, president of The Gwent Group, Inc., an auction consulting firm. "The entire real estate scene is changing significantly due to both age demographics and the Internet," Martin said. "No longer is it unusual for higher quality properties to sell via auction, or for buyers to seek out this marketing venue when searching for property." | 
