If next year's conforming loan levels were in place today, only a couple dozen more home buyers in California's San Francisco Bay Area would benefit.

Throughout California some 4,100 additional home buyers will benefit during all of next year from Fannie Mae and Freddie Mac raising the single-family conforming loan limit from $322,700 to $333,700, according to the California Association of Realtors.

Conforming loan interest rates are about 0.25 percent to 0.50 percent cheaper than jumbo mortgage loan rates, and that could save a typical California home buyer as much as $32,000 or more over the life of a 30-year mortgage, according to CAR.

"While this is good news for many home buyers, Fannie Mae's and Freddie Mac's new loan limits do not go far enough," said CAR President Ann Pettijohn.

In Santa Clara County, for example, the closed-sale median price of single-family detached homes was $569,000 in October, up $20,000 from $549,000 in October a year ago, according to the Bay Area Real Estate Market Newsletter, published by statistician Richard Calhoun, broker owner of Creekside Realty in San Jose.

That's more than three times the national median of $172,000, according to National Association of Realtors' figures.

"It's almost comical," said Robert Aldana, a real estate and mortgage consultant and publisher of LetsTalkRealEstate.com in San Jose.

"That $11,000 difference will be nonexistent as home prices go up, by the time the new conforming levels are in place next year. It doesn't do much for Silicon Valley," Aldana added.

There were 141 single-family detached homes with prices eligible for current cheaper conforming rates, but 5,941 that were not, according to a recent search of listings found on MLSListings.com, the online public access to the area's multiple listing service operated by R.E. InfoLink of Campbell.

That included single-family detached homes listed in Santa Clara, San Mateo, Santa Cruz, Monterey, San Benito, San Francisco, Alameda and Contra Costa counties.

An additional 25 more single-family detached home listings—for a total of 166—were found to be eligible for lower rates if next year's conforming loan levels were available now.

The comparison represents only a moment in time. New listings will add more conforming loan-eligible homes. Some 1,100 buyers in the San Francisco Bay Area will ultimately benefit from the higher conforming loan limits next year, CAR estimates.

"It doesn't affect a whole lot of buyers, but it does make it possible for some renters to become buyers. It can be a condo in a decent neighborhood," said Mary Pope-Handy, a real estate agent with Intero Real Estate Services in Los Gatos.

The median price of condos was $349,950 in October, according to Calhoun's report.

The new conforming loan limits will also help reduce costs for those who refinance jumbo loans into cheaper conforming mortgages, says Robert McCarthy, a mortgage planner with American Family Funding in Campbell.

"For the ones it does impact (having a first mortgage of $333,700 or less) with a loan amount of just $330,000, an 0.5 percent drop would save them $74 a month. Over five years that's $4,440," McCarthy said.

Fannie Mae and Freddie Mac adjust conforming loan limits annually. The conforming loan limits are based on the October-to-October changes in the average home price published by the Federal Housing Finance Board (FHFB). FHFB's figures come from its monthly survey of lenders. The survey includes both new and existing homes.

Additional loans limits for 2004 are $427,150 for two-family-home loans; $516,300 for three-family-home loans; and $641,650 for four-family-home loans. The maximum amounts for mortgages in Alaska, Hawaii, Guam and the U.S. Virgin Islands are 50 percent higher than limits elsewhere because incomes relative to home prices earn those areas a "high-cost" designation.

To help more buyers and refinancing home owners benefit from conforming loan levels, CAR is lobbying for the "Improving Homeownership Opportunities in High Cost States Act of 2003" (H.R. 3507), recently introduced by U.S. Representative Brad Sherman (D-San Fernando). The bill, if passed, would make parts of California and other high-cost regions eligible for a 50 percent increase in conforming loan levels.

Such legislation has been a tough sell in past legislative sessions.

Real estate writer Broderick Perkins, executive editor of San Jose-based DeadlineNews.Com, writes regularly for
Saratoga News.