WASHINGTON (11/16/11)--The Credit Union National Association (CUNA) stressed that restoring the Federal Housing Administration loan limits "will provide consumers in all markets access to safe, affordable mortgage financing," and will stabilize the mortgage market as private investors re-enter the market, in a letter to members of Congress.
CUNA in the letter urged Congress to restore FHA mortgage loan limits by supporting H.R. 2112, the minibus conference report. The letter was cosigned by the National Association of Realtors, the Mortgage Bankers of America, the National Association of Homebuilders, and other groups.
Language that would return the FHA's insurance limit for single-family home loans to $729,750 is attached to the minibus spending bill.
The mortgage legislation, known as the Homeownership Affordability Act of 2011, was introduced earlier this year by Sens. Robert Menendez (D-N.J.) and Johnny Isakson (R-Ga.), and co-sponsored by Sen. Dianne Feinstein (D-Calif.). The legislation would allow the FHA to guarantee mortgages up to $729,750, or 125% of local median prices for single family homes, through Dec. 31, 2013.
The maximum conforming loan limit was previously set at $729,750, but fell to $625,500 on Oct. 1 when a loan limit extension could not be agreed to by Congress. The Housing and Economic Recovery Act (HERA) of 2008 requires that Congress set maximum conforming loan limits each year.