The stories were bleak. Families owing more than their homes were worth; foreclosure signs on lawns becoming a common sight. In response to the subprime mortgage crisis that busted the real estate bubble back in 2008, the government passed legislation to get the housing industry moving again--but some of that legislation is set to expire soon.
As always, New York City is positioned to be an exception, and the wrinkle of impending national policy affecting the size of government insured-loans will have a disproportionate impact on buyers looking at apartments for sale in Manhattan and in other high-cost metropolitan areas.
With the government-loan limit to be reduced by around $100,000 as of October 1st, hundreds of real-estate buyers from the suburbs and city will be forced to either come up with a larger down payment, or face the prospect of signing “jumbo” loans at the real estate table. An appraisal reported in New York Times reports that the new limit would affect about 7 percent of transactions in Manhattan.