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July 25, 2008 4:20:37 PM CDT

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Feds Boost Mortgage Limits

Posted Mar 6, 08 6:10 PM CST in Business 

(Newser) – Government-backed mortgage guarantors Fannie Mae and Freddie Mac can now back loans up to $729,750, the Wall Street Journal reports, after the Federal Housing Administration put into effect that provision of the federal economic stimulus package today. More than 70 counties in the US are subject to the new limit, and ceilings will rise from the previous cap of $417,000 in many others.

Officials hope raising the mortgage giants’ limits will bring down interest rates on the biggest loans (more than $417,000), which are currently as much as a percentage point higher than smaller loans. "Families all over the US will benefit from this access to credit, and increasing these loan limits will inject much-needed liquidity into the housing market," the FHA commissioner said.

Source Wall Street Journal

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The Fannie Mae building in Washington, in this May 2, 2007 file photo, in Washington. (AP Photo/Manuel Balce Ceneta, file)   (Associated Press)
Fannie Mae President and Chief Executive Officer Daniel Mudd, makes his remarks during a forum on housing, Monday, Dec. 3, 2007, at the National Press Club in Washington. (AP Photo/Manuel Balce Ceneta)   (Associated Press)
Real estate agents' signs line a Birmingham, Mich., street in this Feb. 21, 2007 file photo. The federal government today raised the ceiling for loans insured by Freddie Mac and Fannie Mae as high as...   (Associated Press)
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Federal Reserve  • Fannie Mae  • Freddie Mac  • Federal Housing Administration  • liquidity


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