Why did the Fed raise the Conforming Loan Limit?

This is GREAT NEWS and a temporary gift to us who are buying real estate and those of us who have 2 loans on our property here in the Santa Barbara area now have a possible opportunity to refinance into one loan.  By raising the conforming loan limit to $729,750.  this allows buyers to obtain the best price available for an owner occupied purchased property all in one loan rather than having a combination of loans, at different interest rates like before.

Also the FHA loan limits has been raised allowing the Santa Barbara area to be able to purchase owner occupied properties with 3-5% down at great rates.  These loans have never been available to us because their loan limits were too low.

Those who have purchased in the past may be ready for a refinance into one loan if the rates are lower than the current loans. This offer from the Fed lasts only until December 2008.