Legislation introduced in the Senate would extend temporarily higher loan limits on conventional and government mortgages established during the heat of the 2008 financial crisis.
S. 1508, the Homeownership Affordability Act of 2011, has been introduced by Sen. Robert Menendez (D-N.J.) and Sen. Johnny Isakson (R-Ga.).
The bill would extend higher loan limits established through the Economic Stimulus Act of 2008 and the Housing and Economic Recovery Act of 2008 until end of 2013. Those limits were raised to as much as $729,750 for loans secured by properties in high-priced areas and insured by the Federal Housing Administration or purchased by Fannie Mae and Freddie Mac.
The higher limits are set to expire on Sept. 30.
David H. Stevens, president and chief executive officer of the Mortgage Bankers Association and former FHA commissioner, praised the senators for introducing the bill and called on Congress to act quickly to pass the legislation.
“This bill is consistent with MBA’s policy that the loan limits should be allowed to fall back to the lower levels once the housing market stabilizes,” Stevens said in a written statement. “Given the slowdown in the housing recovery, we have concerns whether this is the right time to add another stress to the market.”
Similar legislation has already been introduced in the House.
