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High Cost Loan Limits Extended

Mortgage News

Congress has approved a bill that extends loan limits on homes in high-cost areas and provides additional funding for apartment loans.

The U.S. Senate and House of Representatives Wednesday passed H.R. 3081.

The legislation extends the current conforming loan limits through the new fiscal year beginning tomorrow. High-cost loan limits as high as $729,750 were set to expire today — the end of the government’s fiscal year.

High-cost limits were originally established with the passage of the Economic Stimulus Act of 2008, which was signed into law by President George W. Bush in February 2008.

H.R. 3081 also extends loan limits for loans insured by the Federal Housing Administration, including home-equity conversion mortgages.

“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,” Mortgage Bankers Association Chairman Robert E. Story Jr. said in a news release today. “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.”

H.R. 3081 additionally provides $20 billion in loan commitment authority for FHA’s General and Special Risk Insurance Funds.

“Providing the FHA with additional multifamily commitment authority will help ensure funding for the continued development, renovation and mortgage refinancing necessary to preserve affordable rental housing in this country,” Story stated. “This sector has been crucial during the recent housing downturn and credit crisis, and FHA needs the additional authority in order to ensure the market remains liquid.”

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