Elected officials support increasing federal loan limits for Garfield County
December 21, 2009
GLENWOOD SPRINGS – Real estate agents got the support they were seeking from both the Garfield Board of County Commissioners and the Glenwood Springs City Council.
Glenwood Springs Mayor Bruce Christensen and county Commissioner John Martin, as well as U.S. Sens. Mike Bennet and Mark Udall and 3rd Congressional Rep. John Salazar, have all penned letters supporting the request for increasing the Garfield County’s Federal Housing Administration (FHA) loan requirements from $425,000 to the maximum $729,000 (not the $480,000 that was previously reported), to better reflect the county’s median home price. They’ve also received support from the Carbondale town trustees.
“Adjusting loan limits in Garfield County will assist in the housing market making a comeback countywide and create jobs here,” Martin wrote. “Because housing in the eastern part of the county is an integral part of the resort economy [and is] so important to the people of Garfield County.”
“We have gotten every bit of support that we can tap,” said Glenwood Springs Association of Realtors Government Affairs Director Sarah Thorsteinson.
Nationwide the FHA conforming loan limit is $417,000. However, in resort areas like Pitkin and Eagle counties, where the median home prices are significantly higher, Congress raised the loan limit in 2009 to $729,000 as part of the American Recovery and Reinvestment Act.
Thorsteinson argues that the current situation with Pitkin and Eagle counties having the maximum loan limit, in contrast to Garfield County’s lower limit, is driving prospective buyers from Carbondale and Glenwood Springs to the upvalley towns of El Jebel and Basalt.
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Thorsteinson said previously that buyers are traveling upvalley because they can qualify for a lower interest rate in an FHA loan for a similarly priced home, which also requires less money down.
Buyers wanting to purchase homes in the $500,000 to $600,000 range in Carbondale or Glenwood Springs would have to qualify for a “jumbo” loan, which are more difficult to qualify for and also carries a higher interest rate, according to Thorsteinson.
Thorsteinson said the Garfield County limit should already be around $480,000, and that is at least what she expects the U.S. Department of Housing and Urban Development to be able to raise the limit to next year.
Thorsteinson must submit the loan limit appeal by Dec. 21 in order for the limit to be increased for 2010.
If the area from Aspen to Parachute could be designated a micropolitan statistical area (MSA), Thorsteinson said that the FHA could raise Garfield County to the $729,000 limit. However, she said that the Office of Management and Budget, and the U.S. Census, will not be reviewing any MSA requests until 2013. So, it could take three years before the county’s limit could be raised to the $729,000 limit.
That is also why Thorsteinson expected to at least get the limit raised to the $480,000, next year.
But after a recent discussion with a representative from the FHA, Thorsteinson said the FHA could go ahead and designate the county a MSA for the purpose of this specific program, which could get the limit increased to the maximum for 2010.
That is what she is hoping for. She has to submit the appeal by Dec. 21, which she said will happen. Then it’s just a waiting game to hear back.
“We don’t have any indication of when we will hear back,” Thorsteinson said.
The increase would also give people attempting to refinance their current high-interest home mortgage to a FHA low-interest loan, another option.