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Clark Howard's Tips

Jumbo loan relief finally hits the market

June 11, 2008

The real estate market's greatest losses -- in terms of both dollars and percentages -- have come in tony neighborhoods. That's because jumbo loans have not been available, or were only available at very high interest rates. Jumbo loans typically begin at $417K.

Months ago, a law was passed that allowed you to take out a jumbo loan in expensive housing markets at conventional loan rates. But the loans never really appeared in the market. People thought they'd be able to refinance or move up to a larger house, yet it was essentially vaporware.

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Now these modified conventional loans, which are about a quarter of a point higher, finally are showing up. So if you were trying to sell and would-be buyers couldn't get financing, take heart. Or if you wanted to refi a high-cost loan in a high-cost neighborhood, you may be able to get that loan now. The politicians hope this will get the high-end market moving again.

What areas will benefit most from the new influx of jumbo loans at near-conventional rates? Check out the complete list. (Editor's note: This is a PDF file.)

More Clark Howard Home Tips Capitulation has benefits for buyers and sellers  Inflated home values are in the eye of the beholder  Is it time to raise your homeowner's coverage?  A bust, a bailout and new mortgage lending rules  Pay attention to foreclosures at the risk of missing other deals  Hawaii, California mandate new green energy measures  Jumbo loan relief finally hits the market  Consumers win the battle of Real Estate commissions  Investors to hand you a mortgage reduction?  Occupancy fraud stalls housing market recovery  Full list