OFHEO Will Not Cut GSE Loan Limit in '08

Even though home values are sinking in many housing markets, the Office of Federal Housing Enterprise Oversight said Tuesday that "under no circumstance" will it decrease the Fannie Mae/Freddie Mac loan limit in 2008.Currently, the loan limit for the government-sponsored enterprises is $417,000. Politicians and lenders alike have been asking for an emergency increase in the limit as a way to improve liquidity in the secondary market. OFHEO also said it is seeking additional public comment on how it calculates and implements the conforming loan limit each year. (In the past, the loan limit was based on the sales price of homes across the United States. Historically, home prices rise each year, causing the cap to increase. However, in 2007 there was no increase in the GSE loan limit.)