Senate Majority Leader Trent Lott says he and other Republican leaders oppose a Clinton administration proposal to raise FHA loan limits.

"Expanding the role of the federal government into a sector where the private market is thriving is in direct opposition with the Republican agenda," the Mississippi Republican wrote in a May 13 letter to Robert D. Bannister, a Fannie Mae lobbyist.

"I expect that the Congress will consider reforms to the FHA this year, but I do not expect that we will raise the mortgage limit," Sen. Lott wrote, adding that House Majority Leader Richard K. Armey agrees with him.

The Clinton administration in January proposed raising the ceiling on home mortgages eligible for FHA insurance to $227,150, from the current maximum of $170,362.

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