MBA Wants GSE Loan Limit Hiked with Stimulus Bill

The Mortgage Bankers Association wants Congress to raise the $417,000 conforming loan limit on Fannie Mae and Freddie Mac loans to $625,500 when it passes an economic stimulus bill early next year. Raising the conforming loan limit to $625,500 would achieve better execution for higher balanced loans in the TBA (to-be-announced) securities market, according to MBA associate vice president Josh Denney. "It would provide more affordable financing for borrowers," he said. The maximum loan limit for Fannie, Freddie and Federal Housing Administration loans is slated to adjust from $729,750 down to $625,500 on January 1. (The $729,750 is for "high cost" areas only.) Democrats in Congress and the incoming administration of president-elect Barack Obama are expected to seek an extension of the maximum $729,750 loan limit or make it permanent. "MBA is pushing for a permanent loan limit structure that is similar to what we have now," Mr. Denney said.