(Update 3; adds House/Senate FHA reform agreement, adds GSE loan limit update, adds details from press conference) Key Congressional representatives and officials from the Bush adminstration said Thursday that they have hammered out a tentative $145 billion economic stimulus package, including significant changes to both the FHA and GSE mortgage caps; roughly one week ago, President Bush called on Congress to deliver a $150 billion economic package to help boost the sagging U.S. economy. From the WaPo:
The deal, reached after an arduous, late-night negotiation between House Speaker Nancy Pelosi (D-Calif.), House Minority Leader John A. Boehner (R-Ohio) and Treasury Secretary Henry M. Paulson Jr., was a work of difficult compromise. Democrats acceded to Republican demands, jettisoning plans to extend unemployment benefits and food stamps for now but concluding that they could revisit the issue if the economy continues to slide. Republicans agreed to offer rebates as large as $1,000, even to working families that earn too little to pay income tax, an idea they had roundly rejected in past stimulus plans.
The stimulus package includes measures to raise the limit on FHA-insured loans; National Mortgage News reported seperately on Thursday that both House and Senate banking committee leaders have agreed on the final terms of the so-called FHA Modernization Act, and will raise the Federal Housing Administration loan limit to 125 percent of median house prices, with a $730,000 cap. The House stimulus deal also includes a provision to temporarily boost the conforming lending limit, according to details announced by Pelosi and Boehner in a press conference Thursday afternoon. Per the Wall Street Journal:
The package also raises the conforming loan limits for Fannie Mae and Freddie Mac, beyond the current $417,000, which would allow the government-sponsored companies to buy bigger loans in areas with high housing costs. Rep. Barney Frank, the Massachusetts Democrat who chairs the House Financial Services Committee, said the new limit would be 125% of a metropolitan area’s median housing price, up to a cap of about $725,000.
The tentative package announced today will still need to run through the Senate, although Senate Majority Leader Harry Reid (D-Nev.) is quoted in numerous publications as saying that Congress is targeting Feb.15 to send the package to the White House. Senate Finance Committee chairman Max Baucus (D-Mon.) has said Senate leaders will consider economic-stimulus legislation next week. The news of an early agreement comes on the heels of a proposal by Senator Christopher Dodd (D-Conn.), who said he wants to include various mortgage industry measures in the overall plan to be proposed by the Senate.