Congress Approves Extension of Existing Loan Limits

Congress has approved HR 3081, extending existing loan limits through September 30, 2011 for Fannie Mae, Freddie Mac and FHA loans. This means that loans will continue to be guaranteed and insurance programs will remain in place which back loans up to $729,750 in markets where the cost of living is highest. This applies to new loans as well as refinancing.

The benefit of the extension to buyers is great, as it will allow them access to affordable, long-term mortgages with fixed rates, for a longer period of time. The bill also gives the FHA more power to back multifamily loans–great news for development, renovation and mortgage refinancing, which will benefit the housing rental market.

The extension bypasses the previous 2008 extension, which would have expired at the end of 2010. The maximum for conforming loan limits in non-high cost areas remains at $417,000 for Fannie and Freddie and at $271,050 for FHA loans.