President Clinton has signed legislation that raises the caps on mortgages insured by the Department of Housing and Urban Development's FHA program.

Under the $93.4 billion spending package for housing, veterans, and other programs, the FHA program may insure residential mortgages as large as $197,621 in high-cost areas and $109,032 in the least-expensive housing markets. The current limits are $170,362 and $86,317, respectively.

The same law, enacted last week, also eliminates the caps on loans for multifamily residences that may be bought by Fannie Mae or Freddie Mac, and it requires lenders to tell borrowers the difference in cost between FHA- backed loans and privately insured ones.

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