Bill to Wind Down Fannie and Freddie Would Reduce Loan Limits in High-Cost Areas

June 27, 2013
Inman News  
mortgage lending news

The California Association of Realtors warns that expensive housing markets would be hurt by lower loan limits proposed in Senate legislation that aims to replace Fannie Mae and Freddie Mac with a federal mortgage insurer. S. 1217, otherwise known as the Housing Finance Reform and Taxpayer Protection Act of 2013, would set the conforming loan limit for single-family residences at $417,000. The threshold would be adjusted on an annual basis to reflect home price fluctuations. In high-cost areas where the median home price topped $362,600, the conforming loan limit could be hiked to as much as 150 percent of the conforming loan limit ($625,500) during the first year after the bill is signed into law.
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