Schumer Seeks FHA Loan-Limit Hike

Sen. Charles E. Schumer, D-N.Y., has introduced a stand-alone bill to raise the loan limits on Federal Housing Administration single-family loans and offer homebuyers an alternative to subprime loans."My bill will raise the FHA loan limits so that more homebuyers, especially those living in high-cost areas, will have the opportunity to [get] safe and affordable FHA prime mortgages," Sen. Schumer said during a Senate Banking Committee hearing. The New York senator noted that House Financial Services Committee Chairman Barney Frank, D-Mass., supports his bill. The senator said the bill would raise the FHA single-family loan limit from $362,000 to the $417,000 conforming-loan limit in high-cost areas. A copy of the bill was not available at deadline time, but Sen. Schumer's bill is expected to raise the FHA limit in low-cost areas and set the loan limit at the median house price in other areas. These adjustments to the FHA loan limits are contained in a comprehensive FHA reform bill approved by Rep. Frank's committee. Sen. Schumer noted that the inability to get FHA loans in many areas has exacerbated the subprime crisis.