Thursday afternoon, the House of Representatives approved language authored by Reps. Gary Miller (CA-R) and Jerry McNerney (CA-D) to permanently increase the loan limits for Fannie Mae, Freddie Mac, and the Federal Housing Administration.
When the Economic Stimulus Act of 2008 was signed into law earlier this year, the loan limit for both GSE and FHA programs was temporarily increased to a maximum of $729,500 in certain key "high-cost" areas through the end of the year. The provision to make the increases permanent -- proposed just earlier this week -- was included on a last-second amendment to H.R. 3221, the Foreclosure Prevention Act of 2008, which passed the House on a 266 to 154 margin.
"Right now, borrowers and lenders don’t know what to expect," said Rep. Gary Miller. "Home prices are fluctuating, credit is tightening, and foreclosures are going up.
"Adding to the uncertainty is the possibility that loan limits will suddenly drop at the end of the year. I applaud my colleagues for voting to permanently increase loan limits and bring some stability back to the housing market."
The National Association of Realtors has been lobbying strongly for such a permanent increase since early March, but also argued in testimony before the Senate Committee on Banking, Housing and Urban Affairs that the GSE loan limit should be raised to $625,000 across the board as well.
The bill now heads back to the Senate for fine-tuning; Senate leaders had passed a more narrow version of the bill back in March.
The Foreclosure Prevention Act by the House contained numerous other proposals and combined previously-separate bills. HW’s earlier coverage of other key bills in the housing package is available here