The limits on Fannie Mae and Freddie Mac mortgages likely will not take effect on Jan. 1 after all. The Federal Housing Finance Agency (FHFA) said last month that it "has been analyzing approaches for reducing Fannie Mae and Freddie Mac loan limits across the country, and any such change would be announced with adequate advance notice for implementation on Jan. 1, 2014."
A series of new mortgage rules go live on New Year's Day; and the real estate, home-building, and mortgage associations have contended that reducing Fannie Mae and Freddie Mac loan limits simultaneously could result in "a contraction of credit." On Oct. 24, FHFA acting director Edward DeMarco publicly stated that the agency realized the industry "had an awful lot going on" Jan. 1 and will postpone any potential increase. He added that any loan-limit changes will be disclosed six months prior to their effective date and that such changes would not be announced until next month at the earliest. Consequently, that would push any drop in loan limits into at least May 2014.