House Passes Higher Loan Limits

I have just received word from Nora Ziel at Cherry Creek Mortgage that the House today passed higher GSE and FHA loan limits.

The provision raises the loan limits for FHA, Fannie and Freddie to $729,500 until Dec, 31 2008. Too bad this isn’t permanent.

Next steps: the Senate is expected to act next week.

However, the Senate is looking to take a different approach to stimulus package than the House so there may be a longer negotiation period.

At this point, both the GSE and FHA limits look like they will be included in the Senate version.
The FHA provision raises not only the ceiling but the floor, resulting in a fairly wide impact. The limits are to be set based on 125% of local median house price as determined by the Secretary of HUD within 30 days.

Since HUD just established the 2008 FHA limits, one would expect that the new limits could go into effect rapidly after final passage by the Senate and signed by the President.

At least it’s a start and we can only hope that if this passes and makes the impact that we’re all hoping for the Congress, et al, will keep it in force longer.

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