WASHINGTON-The Federal Housing Finance Agency is mulling a reduction in Fannie Mae and Freddie Mac's loan limits that is slated to kick in Jan. 1, 2014.
FHFA has been analyzing approaches for reducing Fannie and Freddie loan limits across the country. Any such change would be announced with adequate advance notice for implementation on Jan. 1, 2014, according to a spokesperson. The maximum loan limit on Fannie and Freddie single-family loans presently is $625,500.
In pursuing this loan limit reduction, the GSE regulator is following its own agenda of trying to entice private capital into the mortgage market. But FHFA acting director Edward DeMarco also is adhering to the new GSE policy that President Obama outlined in an Aug. 5 speech in Phoenix.
"Beyond that, HUD and FHFA should closely examine using their existing authorities to reduce loan limits further consistent with the pace of the recovery, market developments, and the Administration's principles and transition plan for housing finance reform," the White House said in a statement.
