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Obama Seeks Extension for Higher Loan Limits

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The Barack Obama administration is pressing Congress to continue the temporarily higher loan limits that are set to expire.

In a statement today, U.S. Department of Housing and Urban Development Secretary Shaun Donovan and U.S. Treasury Secretary Timothy Geithner announced that they have called on Congress to extend higher loan limits for one year on loans insured by the Federal Housing Administration or sold to Fannie Mae and Freddie Mac.

The higher limit expires on Dec. 31.

“Families are already applying for mortgages that are being turned down or priced higher due to this impending deadline,” the statement said. “The extension of the loan limits is being considered in the upcoming Continuing Resolution, and we urge Congress to enact the extensions immediately in order to assure the smooth supply of capital to the housing market.”

The administration additionally asked for an extension on the First Time Homebuyers Tax Credit, which is set to end on Dec. 1. A limited extension, however, should be accompanied by effective measures to combat tax fraud such as minimum age requirements and proof of purchase.

Also on the table is a request for secure funding for the Housing Trust Fund, which “is an important source of support for extremely low income families who otherwise cannot afford decent housing.” The Fund was created in the 2008 HERA legislation.

The measures announced today are expected to help stabilize the housing market, support prices and keep mortgage rates low.

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