Stimulus Package Raises Loan Limits

The House has passed the $820 billion economic stimulus bill that restores the $729,750 loan limit in high cost areas for the rest of this year. Congress originally raised the maximum loan limit on Fannie Mae, Freddie Mac and Federal Housing Administration loans to $729,750 in February 2008 as part of the first stimulus bill. But that provision expired Dec. 31 and the loan limit adjusted downward to $625,500 where it is today. The Senate is expected to vote on a stimulus bill next week. But so far the Senate package does not include a loan limit increase. Housing industry lobbyists are working to attach the House loan limit provision to the Senate bill. The House bill also includes a provision that increases the loan limit on FHA-insured reverse mortgages from $417,000 nationwide to $625,500 for the rest of calendar year.