High Loan Limits Gaining Momentum

Hot off the presses from National Mortgage News:

Efforts to reinstate the $729,750 maximum loan limit for Fannie Mae, Freddie Mac and FHA loans has garnered the support of 137 House members, including 25 Republicans. The Senate has already passed a two-year extension of the maximum loan limit in high cost areas as part of a Department of Housing and Urban Development appropriations bill. However, key Republican leaders in the House oppose such an extension — claiming a gradual rollback of the GSEs’ share of the market will allow for a revival of the private MBS business. 

Rep. Bill Posey, R-Fla., collected the signatures of 136 of 435 his colleagues to restore the maximum loan limit that dropped down to $625,500 on October 31. He contends the loan limit reduction will make it harder for qualified borrowers to get a home loan. “As a Realtor of more than 30 years, I can tell you that today qualifying for a home loan is actually more difficult than it should be,” Rep. Posey said. “Restoring the loan limit to their September 30 level for the short term will help the housing market and the economy recover,” the Florida Republican said.

Rep. Posey’s press secretary George Cecala said supporters of the loan limit reinstatement are continuing to talk with, and educate, other members about the impact in high cost areas as well as the impact in lower cost areas where the loan limits on FHA loans have been reduced in nearly 600 counties. “We want the housing market to get going again and we want people to be able to sell their homes and want qualified borrowers to buy those homes. Otherwise it comes to a grinding halt,” Cecala said.

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