WASHINGTON – The economic stimulus packaged passed by Congress will add some much-needed liquidity in high-priced mortgage markets by allowing Fannie Mae and Freddie Mac to buy larger mortgages from credit unions and banks.
The bill raises the limits on so-called conforming loans, those the two secondary market giants can buy, from the current $417,000 to 125% of a metropolitan area’s median home price, with a ceiling of $729,500 for the rest of the year.
It also raises the limits on Federal Housing Authority loans from $362,000, also to 125% of the metro area’s median area home price.
Many credit unions in hard-hit California markets see the move as a way to add liquidity to the market and to move more of their mortgages off their books by selling them to Fannie or Freddie.
Both CUNA and NAFCU supported the provision.
