Trade Groups Want GSE Loan Limit Extension

Housing trade groups are urging Senate appropriators to go along with a House-passed provision that extends the GSE $729,750 loan limit, which is due to expire Dec. 31, for another nine months. "We believe continuing the current higher temporary loan limit is necessary to complete the recovery of the nation's housing market," the nine trade groups say in a joint letter. The House has passed a Department of Housing and Urban Development appropriations bill that extends the $729,750 maximum loan limit for Fannie Mae, Freddie Mac and Federal Housing Administration loans for the rest of the 2010 fiscal year, which ends Sept. 30, 2010. The Senate did not include an extension because raising Fannie and Freddie's loan limit raises budget costs. The Senate is expected to accept the loan limit extension when House and Senate appropriators meet in conference to agree on a final HUD FY 2010 budget bill. Congress raised the loan limit to $729,750 in Feb. 2008 as part of the Bush administration's stimulus bill. It was extended again in Feb. 2009 with the passage of President Obama's stimulus bill. "Although the economy is showing signs of recovery, current conditions require those limits to stay at the higher level," the trade groups say.