You should know the loan-limit issue by now: In 2008, Congress raised the maximum amount of the loans the government (through FHA, Fannie, and Freddie) could back. But on October 1 those limits dropped back to their old values, despite the lobbying efforts of a host of industry groups, including your Realtor associations.
Although much of the media (incorrectly) portrayed this as affecting only the wealthy, in reality it hit across the board. (See our previous post explaining how.) Lower loan limits could put up further roadblocks to home sales, which is exactly what we don’t need.
So (and sorry for burying the lede), yesterday the Senate voted 60-38 to restore the higher loan limits. As the Wall Street Journal explains, though,
The measure faces tough odds, however, in the Republican-controlled House. Many GOP lawmakers oppose doing so, arguing that reducing loan limits represents a small step toward dialing back government support of the U.S. mortgage market.
We’ll keep you updated; you can see all our posts on the topic at VARbuzz.com/topics/loanlimits.