House and Senate committees have approved Department of Housing and Urban Development appropriation bills that extend the $729,750 loan limit through September 2011.
The maximum $729,750 loan limit for Fannie Mae, Freddie Mac and Federal Housing Administration loans in high cost areas is due to expire at the end of this year.
As expected, elected officials and industry groups want to pass an extension now to prevent possible disruptions if the legislative process gets bogged down later this year.
Without an extension, the maximum loan limit would drop back to $625,500.
House and Senate appropriators also are in sync in renewing the Federal Housing Administration's and Ginnie Mae's loan commitment authority at FY 2010 levels. The appropriation bills, which are waiting approval by the House and Senate, authorize FHA to insure up to $400 billion of single-family loans in FY 2011 and Ginnie Mae to guarantee up to $500 billion of MBS.
The appropriators also are allocating $150 million for the FHA Home Equity Conversion Mortgage program.
Without this credit subsidy, FHA would have to make deeper reductions in the loan proceeds that seniors receive in a reverse mortgage transaction.
"We are glad to see this affirmation of support for the HEMC program and a willingness to fund it at a level that will sustain the program," according to Peter Bell, president of the National Reverse Mortgage Lenders Association.
