Appropriators Favor FHA Loan-Limit Hike

House appropriators have attached a provision to the Department of Housing and Urban Development budget bill that raises the Federal Housing Administration single-family loan limit to the conforming loan limit in high-cost areas.The conforming loan limit is currently $417,000. It is understood that the HUD appropriations bill for fiscal year 2008 also raises the FHA single-family loan limit to 65% of the CLL in low-cost areas. In all other areas, the FHA loan limit would be determined by the median house price. The HUD-Transportation appropriations subcommittee approved the HUD budget during a mark-up June 11. The House Finance Services Committee recently approved similar increases in the FHA loan limit as part of an FHA reform bill (H.R. 1852). The HUD fiscal 2008 appropriations bill also suspends for one year a cap on the number of reverse mortgages the FHA can insure.