Editor’s note: This story has been edited from an earlier version to clarify that a proposal to raise the conforming loan limit and upper limits for FHA loan guarantee programs remains part of the economic stimulus bill to be voted on in the Senate.

The Senate Finance Committee approved a proposed economic stimulus package Wednesday that would expand tax rebates in stimulus legislation approved by the House Tuesday.

A full Senate vote on the stimulus bill adopted by the House is expected this week. If the Senate accepts the committee’s proposed amendments or allows other changes to the House bill, negotiations between House and Senate leaders to reconcile differences between the two versions of the bill would begin again.

The bill approved by the House in a 385-35 vote Tuesday — HR 5140, the Recovery Rebates and Economic Stimulus for the American People Act of 2008 — would provide tax rebates of $600 to $1,200 per working family and about $50 billion in tax breaks for businesses (see Inman News story).

The White House and House Democrats had urged Senate lawmakers not to slow implementation the $146 billion economic stimulus package by amending it to include additional tax cuts or relief measures. But legislation approved Wednesday in a 14-7 vote by the Senate Finance Committee includes amendments such as extending tax rebates to Social Security recipients.

The amendments approved by the committee did not address a provision of the House bill that would temporarily increase the $417,000 conforming loan limit for loans eligible for purchase by Fannie Mae and Freddie Mac to 125 percent of the median home price in high-cost areas.

The House bill would also expand Federal Housing Administration loan guarantee programs, which are currently restricted to loans of $362,790 or less, to include mortgages of up to 125 percent of the median home price. Under the HR 5140, the new limits for Fannie, Freddie and FHA programs would be capped at $729,750 and expire at the end of the year.

The issue of conforming loan limits for Fannie and Freddie and limits on FHA loan guarantee programs was outside of the committee’s purview. When debate over the economic stimulus package begins on the Senate floor, the bill put forward in the House bill will be the starting point for possible amendments, including those endorsed by the Senate Finance Committee.

***

Send tips or a Letter to the Editor to matt@inman.com, or call (510) 658-9252, ext. 150.

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