Industry NewsMortgage

House OKs capital backstop for Fannie, Freddie

Conforming loan limit to be reined in to $625,500

A bill that authorizes a $300 billion expansion of FHA loan guarantee programs and gives the Treasury Department additional leeway to buy the debt of Fannie Mae and Freddie Mac is headed to the Senate -- with the Bush administration lifting a threat to veto the bill. The House of Representatives approved the sweeping housing bill, HR 3221, in a 272-152 vote Wednesday, agreeing to a compromise with the Senate that preserves some, but not all, of the temporary increase in the loan limits for Fannie, Freddie and the Federal Housing Administration. The House, which had previously passed legislation that would have kept the conforming loan limit at up to $729,750 in high-cost areas, went along with the Senate's cap of $625,500. Congress and the Bush administration agreed to a temporary increase in the limits to help home buyers who needed jumbo loans borrow money at more affordable rates. The increase, which took effect in March, is set to expire at the end of the year. The n...