Dems Want to Preserve Higher Loan Limit

Congress will try to restore the $729,750 loan limit for government-guaranteed single-family loans early next year as part of the newly elected president's economic recovery/stimulus bill, according to Rep. Barney Frank, D-Mass. The maximum loan limit for Fannie Mae, Freddie Mac and Federal Housing Administration loans is slated to adjust downward to $625,000 after Dec. 31. And the Bush administration in its waning days is resisting any attempt to keep the $729,750 limit in place. "There is a chance to get them back up again," the powerful chairman of the House Financial Services Committee said. "And I believe that will be in the economic recovery plan," he told attendees at an Office of Thrift Supervision housing forum. But even a restoration after four or five weeks will cause disruption in the jumbo mortgage market. Some industry groups are hoping Sen. Mel Martinez, R-Fla., will be successful in attaching an amendment to the $15 billion auto industry rescue bill that extends the $729,750 loan limit for one year.