Change not until Jan. 1, but benefit can be immediate
ALLEN NORINOOD

Fannie Mae's loan limit for single-family mortgages officially will go up Jan. 1 -- but if you're shopping for a home, you can go ahead and take advantage of the hike now.

The increase in the loan limit means qualifying buyers can borrow more money at the lowest market interest rate. You can buy now, because many loans originated now won't be handed over to Fannie Mae until after the first of the year. Lenders often pool or "bundle" lots of mortgages before selling them to Fannie Mae, which doesn't make loans directly to consumers.

"And it's when they're delivered (to Fannie Mae), not when they're originated, that matters," said Jon Gauthier, head of the mortgage giant's Charlotte office.

Fannie Mae's loan limit will rise to $359,650 from the current $333,700.

You'll find a more complete explanation in a story on Page 9H. The increase can impact other mortgages, such as Veterans Administration loans. And, in that story, a Bank of America executive says that lender already is accepting applications under the new limits.

Borrowers typically pay a bit more, perhaps a quarter of a percentage point, on "jumbo" loans larger than the limit.

"What this means, from a home buyer's and home builder's standpoint, is that you can get more house for that lowest rate," Gauthier said. "It makes it possible for people to buy those extras that they otherwise couldn't."

Gauthier said Charlotte buyers also will benefit because home prices here haven't risen as much as the loan limit.

The average closing price for homes, condos and townhouses sold through the Carolina Multiple Listing Services in September was $197,284, well under the limit.

Home prices here rose 3.42 percent from the third quarter of 2004 to the same period this year. You'll find more about that latest report on home values in Kenneth Harney's column on Page 7H. Meanwhile, the loan limit rose almost 8 percent.

"We will have the same conforming loan limit (as most of the rest of the country)," Gauthier said. "But prices have risen much faster in hot markets....like Washington and Los Angeles."

Buyers also can expect to see more homes offered at prices just under the limit, Gauthier said.

Builders and sellers, when setting prices for houses in that range, often price the homes just under the limit to make them attractive to potential buyers. That cluster of home prices tends to move up with the limit, he said.

Showhouse boosts education

The ABC Designer Showhouse, which ended its run in September, raised more than $32,000 for educational programs --plus a truckload of school supplies donated by attendees.

The showhouse on Lake Norman was built by Patrick Joseph & Associates and sponsored by the Allen Tate Co. The companies presented a check last month to Charlotte Advocates for Education, an independent, nonprofit organization that supports education in Mecklenburg County.
 
Trish Greer, who listed and sold the home for Allen Tate, also donated $6,000 of the sale proceeds. The 7,000-squarefoot home sold for $2.7 million.

Allen Norwood

Allen Norwood: The Charlotte Observer, P.O.. Box 30108, Charlotte, NC 28230-0308; (704) 358-5237; anorwood@charlotteobserver.corn.