Conforming loan limit could stay at $417,000 in '08

OFHEO proposes one-year lag time between prices, loan limit

Federal regulators are proposing to leave the conforming loan limit for single-family homes at $417,000 in 2008, regardless of how steeply housing prices fall this year.

The conforming loan limit — which determines the maximum size mortgage loan eligible for purchase by Fannie Mae and Freddie Mac — is tied to average home-price statistics released each November.

To provide greater certainty for mortgage lenders and home buyers, last year OFHEO said it would allow the conforming loan limit to stay put at $417,000 in 2007, even if home prices fell in 2006.

When the Fede