Congressional Conferees Consider Loan Limits

From National Mortgage News… 

House and Senate conferees will not restore the $729,750 maximum loan limit on GSE-backed mortgages in high cost areas, sources told National Mortgage Newsthis weekend — but they have agreed to bump up the limit on Federal Housing Administration loans in lower cost areas.

The conferees are slated to meet Monday and sign off on the final Transportation and Housing appropriations bill, which contains the loan limit provisions.  The House might vote on the appropriations bill as early as Tuesday.  Senate passage is expected by Nov. 18.

On October 1, the $729,750 loan limit on Fannie Mae, Freddie Mac and Federal Housing Administration single-family loans dropped down to $625,500. 

Despite pressure from Senate to restore the higher loan limit, House conferees refused to go along.

Sources say the conferees did agree to restore the FHA loan limit in hundreds of counties by raising the local benchmark to 125% of the median house price from 115%.  The benchmark dropped down to 115% at the end of September.

This agreement would raise the FHA loan limit in over 500 counties in 42 states. 

One lobbyist indicated the conferees were talking about giving homebuyers greater access to FHA loans in certain areas where GSE loan limits are higher than FHA’s.  But it is unclear if this complex provision is part of the final agreement.

 

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