The Federal Housing Finance Agency is considering a possible reduction in the maximum loan limits for mortgages purchased by Fannie Mae and Freddie Mac, but the agency wants to collect public feedback before making any bold moves.
The GSE conservator sent a request for public comment to the Federal Register this week, asking for input on the possibility of reducing the loan purchase ceilings.
The plan up for consideration would move the max loan limit for one-unit properties from its current $417,000 to $400,000, a 4% reduction. In parts of the country where the limit is $625,500, the ceiling would be pushed down to $600,000.
FHFA says before making a final move, it wants to be aware of any technical or operational concerns.
The agency also is asking respondents to determine whether a six-months advanced warning is enough time for the market to prepare for lower purchase limits.
The conservator will hold off on any adjustments to ensure it has time to review all submitted comments. If changes do occur, they will not impact any loan originated before Oct. 1, 2014.
Feedback will be accepted up until March 20, 2014.
Submissions can be sent to the FHFA via e-mail: loanlimitinput@FHFA.gov.