Industry News

Bush opposes raising FHA loan limits past $417,000

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The Bush administration says it's "strongly opposed" to a proposal to allow the Federal Housing Administration to guarantee loans of up to $500,000, saying the program should be used to help low- and moderate-income families. In a policy statement on HR 1852, a "modernization bill" aimed at allowing FHA to serve more borrowers, the administration also warns that the bill creates too many restrictions on a plan to expand the pool of FHA-eligible borrowers by introducing risk-based pricing. The administration supports provisions of the bill that would raise FHA loan limits to $417,000 in high-cost areas and $271,000 in lower-cost areas. The limits are currently $200,000 in lower-cost areas and $362,000 in high-cost areas. But that's far enough, the administration argues, responding to an announcement by Rep. Barney Frank, D-Mass., that he plans to introduce an amendment to the bill that would raise the limit to $500,000. Some critics have argued that FHA has become almost irrelevant t...