On October 1, the maximum size of loans that can be guaranteed by Fannie or Freddie will drop unless Congress takes action.
However, and as a reminder, news stories painting the loan-limit issue as affecting only the rich are way, way wrong. The $729,750 limit — which is scheduled to drop to $625,500 — is the nationwide maximum. Local limits may be much, much lower.
We reported this before and we’re gonna keep harping on it. Winchester’s limit, for example, will drop from $475,000 to $271,050 (a difference of more than $200,000.)
So yeah, it’s not about the rich.
That said (and sorry to bury the lede), two stories that just came out:
“We want private capital to come back into the market,” the acting commissioner of the Federal Housing Administration, Carol Galante, told a House Financial Services subcommittee. “We support the expiration of the higher mortgage loan limits.”
2. A group of 37 lawmakers from both major parties sent a letter to the House Appropriations committee asking that an extension to the larger loan limits be included in the next debt-ceiling-raising bill, which is considered “must-pass.”
[A] bipartisan group of 37 lawmakers on Thursday called for a short-term extension of regulations that would allow the maximum size of loans that can be guaranteed by government controlled mortgage giants Fannie Mae and Freddie Mac remain at the current level of $729,750.
Other Congress folks disagreed. Their argument? Two — yes, two — jumbo mortgages that found backing by private firms.