Congress Passes Stimulus Bill

Congress has passed the economic stimulus bill that temporarily raises the loan limits for Fannie Mae, Freddie Mac and the Federal Housing Administration in high-cost areas to provide needed liquidity in the jumbo mortgage market. The Senate backed the stimulus bill by an 81-16 vote on Thursday after expanding the tax rebate to seniors and disabled veterans. The House approved the changes later that night by a 380-34 vote. President Bush said he will sign the bill. As passed, the GSE and FHA loan limits go up to 125% of median homes prices with a cap of $729,750. This authority expires Dec. 31. However, Fannie and Freddie can purchase existing jumbos originated after June 30, 2007, which should help lenders that have not been able to sell jumbos since the secondary market for these higher balance loans dried up last summer.