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WASHINGTON — Two House members announced a bill Friday that would prolong the temporary increase in the size of home loans backed by Fannie Mae, Freddie Mac and the Federal Housing Administration.
July 15 -
Fannie Mae and Freddie Mac have taken a big chunk of the jumbo mortgage market away from private investors since 2008 when Congress raised the maximum GSE loan limit to $729,750, according to researchers at the Federal Housing Finance Agency.
June 20 -
The coming change in the conforming loan limit will have a much larger impact on loans insured by the Federal Housing Administration than on those purchased or securitized by either Fannie Mae or Freddie Mac.
May 27
WASHINGTON — Two Senate Democrats and one Republican have introduced a bill that would extend the current maximum size of mortgages backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration through the end of 2013.
Unless Congress takes action, the existing conforming loan limit will expire on Sept. 30. The limit varies by region, reaching as high as $729,750 in areas with the most expensive housing. Congress raised the limit during the financial crisis in response to distress in housing markets, and the higher limit has already been extended twice.
The Senate bill, introduced Wednesday, matches similar legislation in the House. It is being sponsored by Sens. Robert Menendez, D-N.J., Johnny Isakson, R-Ga., and Dianne Feinstein, D-Calif., and has the support of the Mortgage Bankers Association, the National Association of Realtors, and the National Association of Home Builders.
"Allowing these limits to expire would be bad medicine for our economy at a time when we need a booster shot," Menendez said in a press release.
The prospects for extending the higher loan limit are murky. It appears unlikely that a standalone bill will pass, but the extension could be included in some larger piece of legislation that members of both parties view as necessary to pass before Sept. 30.
The conforming loan limit is a rare issue where the Obama administration and conservative House Republicans have taken the same position.
In February, the administration published a paper about the U.S. mortgage-finance system that recommended allowing the temporary increase to expire as scheduled. That position has support from many congressional Republicans who want to see the role of Fannie Mae and Freddie Mac reduced.
