Appropriators Agree to Extend Current Loan Limits

The Obama Administration said it supports an extension of the current loan limits for Fannie Mae, Freddie Mac and Federal Housing Administration mortgages following an agreement by House and Senate appropriators to extend those limits for another year as part of the continuing funding resolution Congress is expected to pass this week. "The CR [continuing resolution] maintains the limits for FHA, GSE ... single-family mortgages at $729,750 through the end of calendar year 2010," according to a statement issued by the chairmen of the appropriations committees. The maximum $729,750 loan limit is due to expire Dec. 31 and it would drop down to $625,500 if not extended. "This could result in major disruptions in the mortgage origination market for larger loan sizes as early as November," the appropriations chairmen said. Earlier in the week, industry trade groups warned Congress that quick action is needed because it is becoming more difficult for lenders to approve mortgages with balances above $625,500 due to uncertainty about an extension.