Rep. John Campbell (R-Calif.) and Rep. Gary Ackerman (D-N.Y.) introduced a bill Friday that would extend the current conforming loan limit for government-backed mortgages for another two years. The Conforming Loan Limits Extension Act, or H.R. 2508, would allow the government-sponsored enterprises and the Federal Housing Administration to guarantee or buy mortgages worth as much as $729,750 in most neighborhoods. If Congress does not pass this bill, the loan limit will drop to $625,500, though the limit will vary by county. A recent report from the National Association of Home Builders showed 17 million homes would become ineligible for less expensive federal funding. The drop could affect as many as 669 counties across 42 states. Federal Reserve Chairman Ben Bernanke, however, told the House Financial Services Committee this week that he believed the private market, including investors and insurers, was ready to take over for the government — albeit at a higher cost to the consumer. How far the bill makes it through the Republican-controlled House Financial Services Committee remains a question. When the Obama administration submitted its white paper on the future of housing finance, it suggested winding down Fannie Mae and Freddie Mac, and the initial step could be allowing elevated conforming loan limits set in 2008 to expire. Campbell said extending the loan limit would help stabilize home prices and allow for a broader recovery for the economy. "The housing market does not need a self-inflicted wound," Ackerman said. "With the economy remaining fragile and the housing sector still struggling to recover, now is not the time to make the cost of mortgages more expensive." Write to Jon Prior. Follow him on Twitter @JonAPrior.