In a memo distributed a few days ago, Ginnie Mae said it will begin to securitize VA Jumbo loans with balances above the current $417,000 conforming loan limit. From the press statement:
Ginnie Mae is pleased to announce that it is eliminating the restriction on the size of mortgage loans guaranteed by the Department of Veterans Affairs (VA) that can be pooled in mortgage-backed securities guaranteed by Ginnie Mae. Effective with pools issued on or after September 1, 2007, Ginnie Mae will no longer limit the size of VA loans to the maximum original loan amount for conforming loans … Ginnie Mae expects that this change will expand the availability of low-cost financing and increase homeownership opportunities for America’s veterans and their families, particularly in high-cost areas.
In light of recent calls by many in the industry to lift Fannie and Freddie’s portfolio caps and/or raise the conforming loan limit, this is certainly interesting news.