The Securities Industry and Financial Markets Association said Thursday that new jumbo conforming loans will qualify for use in the to-be-announced mortgage-backed securities market.

The group recommended that such loans, which are between $417,000 and $625,000 for borrowers in high-cost areas, make up less than 10% of the total balance of the pool eligible for the TBA market.

The decision follows the enactment of housing legislation last month that allowed the GSEs Fannie Mae and Freddie Mac to buy jumbo loans in high-cost markets with a cap of $625,000.

House Financial Services Committee Chairman Barney Frank had asked SIFMA to consider making the change in a letter Tuesday to the group.

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