The Clinton administration and mortgage bankers were dealt a serious blow to their hopes for a higher FHA loan ceiling Aug. 18 when the HUD/VA appropriations conference committee approved a Senate-endorsed plan that features the smaller of two increases. The House-Senate compromise calls for the FHA ceiling to stay at $151,725 in high-cost areas, but would rise in low-cost areas to $77,500 from $67,500, or 38% of the conventional loan limit. The House- endorsed version would have upped the ceiling to $172,675, or 85% of the conventional limit; the floor would have been raised to $101,575, or 50% of the conventional limit. The appropriations bill defeat doesnt necessarily mean the higher FHA ceiling wont be approved. Pro-visions that would allow the higher in-creases remain in the housing reauthor-ization bill, which is also in conference committee. The Senate version of the reauthorization bill, however, is identical to the appropriations bill, a point that could hurt HUDs chances of winning. The housing reauthorization bill isnt likely to be taken up before Congress recesses; mortgage industry lobbyists believe the conference committee will consider the legislation when it recon-venes in September.
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