The article below is from the National Association of Realtors eNewsletter. The initial commentary is mine. Now the House and Senate are finally coming up with some substantive ideas. Raising the FHA loan limits is an action that could have a huge impact on the industry, allowing more first time home buyers into the market. It would also allow for more single loan home mortgages and the recalibration of what a jumbo loan is for the entire industry. Senate wants to raise the limit to $417,000 while the House could go as high as $729,950. I'm pulling for the House version!
Mark Thorngren
Happy Holidays from the Housing Opportunity Program!
Senate passes FHA Reform
After some touch and go moments, last week the full Senate passed FHA reform legislation. The bill was delayed for nearly a month in the Senate as a couple of Senators issued a legislative holds on the bill. Late last week Senators Coburn (R-OK) and DeMint (R-SC) lifted their holds which paved the way for the measure to pass the Senate by a vote of 93-1. Much credit is due to the grassroots effort of REALTORS® in Oklahoma and South Carolina as well as the effort of many REALTOR® volunteer leaders who flew to Washington in early December to specifically lobby for this bill. The bill, S. 2338, differs from the house version, H.R. 1852, in a couple of key areas and the conference committee meetings that will be held to resolve these differences are expected to be contentious. One of the key differences expected to illicit the most debate is the discrepancy in FHA loan limits. The Senate bill increases these limits to $417,000 while the House bill increases these limits to as much as $729,750 in high cost areas. The House bill also gives the Secretary of HUD the discretion to raise this limit by as much as $100,000 in specific markets for a limited time period. NAR has urged Congress to conference the bill as soon as possible, as a reformed FHA program will help homebuyers better afford a home and it will also help homeowners refinance into a safe mortgage product. Read the NAR press release.
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