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Feds Boost Mortgage Limits

Ceiling on loans backed by Fannie Mae, Freddie Mac goes to $729K in 70 counties

By Nick McMaster,  Newser Staff

Posted Mar 6, 2008 6:10 PM CST
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(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.

The Fannie Mae building in Washington, in this May 2, 2007 file photo, in Washington. (AP Photo/Manuel Balce Ceneta, file)
The Fannie Mae building in Washington, in this May 2, 2007 file photo, in Washington. (AP Photo/Manuel Balce Ceneta, file)   (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 $729,500 in some areas. (AP Photo/Carlos Osorio, file)
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)
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)
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)
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California's housing market hopes to see gains from limit boost
San Jose Mercury News

More on the FHA's resurgence
Wall Street Journal

New FHA mortgages will be a great option in high-cost California areas
San Francisco Chronicle

Bush and Fed considering mortgage lender bailout
San Diego Business Journal

 
Federal Reserve • Freddie Mac • Fannie Mae • Federal Housing Administration • liquidity • loan limit

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