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In an important victory for NAHB, the Senate on Oct. 20 approved an amendment to an appropriations bill offered by Sens. Bob Menendez (D-N.J.) and Johnny Isakson (R-Ga.) to reinstate for another two years the higher loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration that expired on Sept. 30.
The vote was 60 to 38, just meeting the necessary 60-vote threshold required for passage under Senate rules.
The appropriations bill includes spending for the Department of Housing and Urban Development and other federal agencies.
NAHB has been aggressively lobbying for the Menendez-Isakson amendment directly on Capitol Hill and through its grassroots membership.
A “key vote” letter was sent to members of the Senate on Oct. 19 urging them to support the amendment to spending bill H.R. 2112 to temporarily restore the higher conforming loan limits.
The letter noted that the current lower loan limits will “further restrict overall mortgage liquidity in the marketplace and place further downward pressure on home prices. Restoring the higher loan limits will provide home owners and home buyers with safe and affordable financing while providing a much-needed boost to housing markets all around the country.”
To build support for the amendment, NAHB also sent out a BuilderLink Alert notifying association members that the Senate might consider a measure to reinstate the higher conforming loan limits.
Members were urged to contact their senators and call on them to support the Menendez-Isakson amendment.
Effective on Oct. 1, the loan limits reverted to the lower levels for high-cost areas established under the Housing and Economic Recovery Act of 2008.
The national ceiling for mortgages securitized by Fannie Mae and Freddie Mac or insured by the FHA dropped from $729,750 to $625,500 and the formula for establishing area loan limits became more restrictive, producing decreases for areas in addition to those currently bound by the national ceiling.
A recent NAHB study found that allowing the limits to revert to 2008 levels would make millions of home purchases ineligible for Fannie Mae, Freddie Mac and FHA funding and require them to be financed with higher mortgages interest rates, fees and downpayments and more stringent credit standards.
After passage of the Menendez-Isakson amendment, NAHB Chairman Bob Nielsen issued a statement commending the Senate action and noting that “the 60-to-38 vote demonstrates bipartisan support for pro-housing policies that will help our industry to create jobs and spur economic growth.”
He also called on Congress to move soon to ensure that this measure is enacted into law.
“Otherwise,” said Nielsen, “the current drop in mortgage loan limits will reduce housing demand and place downward pressure on home prices in major markets. This will exacerbate the current housing downturn, trigger more foreclosures, impede job growth and endanger the fragile economic recovery.”
As the appropriations process moves forward, NAHB will turn its focus to preserving the loan limits extension, among other priorities, in the HUD appropriations bill.
To view the legislation, click here and type bill number H.R. 2112 in the box in the center screen.
For more information, email Scott Meyer at NAHB, or call him at 800-368-5242 x8144.