Lawmakers look to extend loan limits

The FHA’s conforming loan limits — the largest mortgages the government is willing to back — are set to drop on October 1. That would mean, realistically, that prospective buyers of millions of homes across the country would no longer be able to get reasonable financing.

Naturally we’ve been pushing to extend the higher limits past September; the last thing this market needs is another road block (or even a speed bump).

imageWe’ve gotten some Congressional support from Reps. Gary Ackerman (D-N.Y.) and John Campbell (R-Calif.), who introduced a bill to extend the current conforming loan limit  for another two years.

Their bill is HR 2508, the Conforming Loan Limits Extension Act, and it would allow Fannie, Freddie, and the FHA to buy or back mortgages worth as much as $729,750. (Without it, the loan limit will drop to a maximum of $625,500 — lower in some counties, and when the National Association of Home Builders did the math, it found that something like 17 million homes would instantly be out of range of federal backing.) Click here to see how the reduced limits will affect Virginia cities and counties.

The idea, of course, is to wean the nation from such wide government support — more than 90% of mortgages these days are backed or owned by one of those “F”s. But we’ve all seen how finicky private capital can be, especially when things get rough.

As Rep. Ackerman put it, “The housing market does not need to a self-inflicted wound. With the economy remaining fragile and the housing sector still struggling to recover, now is not the time to make the cost of mortgages more expensive.”

About Andrew Kantor

Andrew is VAR's editor and information manager, and -- lessee now -- a former reporter for the Roanoke Times, former technology columnist for USA Today, and a former magazine editor for a bunch of places. He hails from New York with stops in Connecticut, New Jersey, Cincinnati, Columbus, and Roanoke.
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2 Responses to Lawmakers look to extend loan limits

  1. Carl M. W. Grenn Sr. says:

    I have contacted Rep Whitman and the two Senators. I earnestly hope that the current Mortgage limits will remain in place at Fannie and Freddie and FHA and VA.
    Since these limits are so critical in today’s financial environment, and to maintain a sound National Mortgage Market for REALTORS, Builders and Home Buyers and Sellers, it will be interesting to see if the Mortgage Limits will be retained. If they are not retained, Our Economy looses and all hard working people lose, we all lose except Wall Street, that was the Major cause of the Financial Crisis. But Congress, the Treasury and the Federal Reserve can not find the cause of the disaster, so it can be truly corrected. One thing that I have noticed on C Span on the Financial Hearings is they do not have hard working Mortgage bankers, real Professionals on the Panels. How can you solve this problem with out them? CMWG Sr.

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