WASHINGTON - The Senate has given the final congressional approval of legislation that would raise the limit on the size of single-family mortgages insurable by the Federal Housing Administration to $151,725 from $124,875.
The increase was included in an $86.9 billion appropriations bill financing veterans and housing programs as well as a controversial space station. The appropriations are for fiscal 1993, which begins Wednesday.
The Senate cleared the bill late Friday, and it was sent to the White House for President Bush's signature. Only one of the 14 annual appropriations bills need for fiscal 1993 had been signed into law.
The veterans affairs and housing bill fell $3.6 billion below what was requested by the President, but reflects differing priorities. Among them is the increase in the FHA mortgage insurance limit.
Including Higher-Priced Homes
The goal of the increase, supported by real estate, housing, and mortgage banking interest, is to expand participation in the program in areas where median home prices exceed the existing cap.
Under the program, the Federal Housing Administration insurers loans made by private institutions to home buyers.
Critics contend the current limit precludes participation by buyers in high-cost housing regions such as California and New England.
Closing Costs Provisions
The bill would provide $23.8 billion for the Department of Housing and Urban Development.
Additionally, the bill would eliminate an FHA ruled that only 57% of closing costs on FHA-insured loans can be financed, and establish new minimum down-payments ranging from 3% to 10%.
While congress has been unwilling o approve additional money for the Resolution Trust Corp. to continue the savings and loan bailout, the housing bill includes $2.6 billion to resolve institutions seized by the government before the cleanup began in August of 1989.