Republicans and Democrats in the U.S. Congress agreed on Monday, Nov. 14 to raise conforming loan limits backed by the Federal Housing Administration (FHA), but not for those insured by Fannie Mae or Freddie Mac.
A joint committee has been tasked with approving a “minibus” spending bill, the Fiscal Year 2012 Agriculture, Commerce/Justice/Science (CJS), and Transportation/Housing and Urban Development (THUD) Appropriations bill, which is on its way to a House vote.
The measure puts the maximum size of an FHA-insured mortgage loan back up to $729,750 in certain high-cost areas through 2013. On Oct. 1, 2011, limits fell to $625,500, raising concerns among those who said lower limits would serve to further harm the housing market.
Reasoning for raising the FHA-insured loan limits was that the agency is “subject to greater congressional scrutiny and oversight.”
Meanwhile, Fannie Mae and Freddie Mac “have been under public scrutiny for their questionable businesses practices and use of billions in federal bailout funds, some of which have been used for extravagant management bonuses,” according to the bill summary.
Written by Alyssa Gerace