The House Appropriations Committee has voted to let the FHA insure loans as large as roughly $198,000 in high-cost areas and $109,000 in the lowest-cost housing markets.

A similar provision passed the Senate Appropriations Committee on June 11.

The Mortgage Bankers Association - which along with the National Association of Realtors and the National Association of Home Builders has vigorously supported an FHA expansion-called last week's House action "extremely good news." But MBA lobbyist Michael J. Ferrell warned that the measure still faces challenges in the full Senate and House.

Fannie Mae, Freddie Mac, and the private mortgage insurers, who oppose a larger role for the FHA, are said to be pushing a provision that would require lenders to certify that homebuyers who received FHA loans were first turned down for a nongovernment loan. Mortgage bankers are "incensed over the fact that the GSEs (Fannie Mae and Freddie Mac) would be basically telling their customers-the lenders-how to deal with borrowers," he said.

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