The Housing and Economic Recovery Act of 2008 established a benchmark loan limit nationwide of $417,000 and mandated that in order to raise that limit an area would have to prove that its home values had increased above the highest values before the decline in 2007. While most of the nation has remained below 2007 values, there have been pockets of the country that have had a remarkable recovery leading the Department of Housing and Urban Development (HUD) to announce loan limit increases in 33 counties nationwide. Ten out of the 33 counties are right here in Colorado, six of which are our own Denver metro counties!
Adams, Arapahoe, Broomfield, Denver, Douglas and Jefferson counties will now enjoy a loan limit has increase from $424,350 to $458,852. Meanwhile Boulder will have a loan limit increase to $474,950.
Other areas nationwide enjoying an economic upturn are Boston, Nashville, Seattle and four areas in California. None of those areas received as much of an increase as we did indicating how hot Denver’s market still is today.
This increase will hopefully help some buyers who could not qualify or afford a jumbo loan due to their higher down payment requirements, higher rates and increased restrictions such as debt to income requirements, credit score, and reserves. Many self employed business people have difficulty qualifying for the DTI (Debt to income) requirements since they write off so much in taxes. So, this could give some hardworking entrepreneurs the opportunity to get that higher price home without dealing with a jumbo home loan.
Overall, it’s a good indicator of the strength of our market here in Denver and hopefully brings some more options to those who want a luxury home in Denver.