Congress Extends Higher Reverse Mortgage Loan Limits

The House of Representatives passed a bill early Thursday morning to avoid a government shutdown before the new fiscal year begins Oct. 1st.

The Continuing Resolution, plans to extend higher loan limits for mortgages backed by Fannie Mae and Freddie Mac through Sept. 30, 2011.  In addition, the measure extends the $625,5000 loan limit for reverse mortgages backed by the Federal Housing Administration.

“Extending the existing limits is essential to helping borrowers continue to have access to affordable long-term, fixed-rate mortgage credit in today’s struggling economy,” said Robert E. Story, Jr., CMB, Chairman of the Mortgage Bankers Association.  “The current limits have been a key component of keeping the mortgage market functioning, helping keep mortgage interest rates low for consumers who want to purchase a home or refinance an existing mortgage.”

All the loan limits were set to expire at the end of the year and many Republicans were not supportive of extending the loan limits.  “Fannie and Freddie are synonymous with mismanagement and waste, and have become the face of Too Big to Fail,” Sen. John McCain, R-Ariz, told CNN early Thursday morning.

Next, the bill goes to President Obama, who is expected to sign it before Friday, the first day of fiscal year 2011.

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