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Higher Conforming Loan Limits Extended Through 2010
In a victory for NAHB, a provision that will extend the loan limits for mortgages issued by the Federal Housing Administration and purchased by Fannie Mae and Freddie Mac through the end of next year was included in a continuing resolution approved by the House and Senate on Oct. 29.
The loan limits will continue to be capped at $729,750 in high-cost markets. Those caps were due to expire on Dec. 31 if Congress had not taken action.
Signed by President Obama, the continuing resolution in which the loan limit extension was included will provide Congress the time it needs to complete all of the outstanding fiscal 2010 appropriations bills.
A joint statement issued last week by Treasury Secretary Timothy Geithner and Housing and Urban Development Secretary Shaun Donovan on the extension of the home buyer tax credit also called on Congress to extend the expiration period for the higher conforming loan limits and to identify a financing source for the National Housing Trust Fund.
On Oct. 26, NAHB, along with the National Association of Realtors® and Mortgage Bankers Association, sent a letter to House and Senate leaders urging Congress to act soon to extend the current higher loan limits for Fannie Mae, Freddie Mac and the FHA that were due to expire at year-end.
The letter noted that borrowers had unnecessarily been denied financing because of uncertainty over expiring loan limits and consumers were unable to lock in current interest rates beyond 60 days for loans over $625,500.
“The higher limits are a key component of the economic recovery efforts because they help make affordable loans available for a broader spectrum of consumers who want to purchase a home or refinance an existing mortgage,” the letter said.
“We believe these temporary limits have benefited the mortgage industry and consumers during what has been a turbulent period for our nation’s economy,” it said. “In light of the continuing weakness in the secondary market, we urge Congress to take action so that the GSEs and FHA can be permitted to continue providing capital to support loans to families across America.”
For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144.
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