Industry NewsNews Brief

Fannie, Freddie limits back to $729,750

FHA will also implement stimulus bill changes

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Conforming loan limits have been restored to as much as $729,750 in 250 counties around the U.S. as the regulator of Fannie Mae and Freddie Mac implements a policy change in last week's $787 billion economic stimulus bill. H.R. 1, the American Recovery and Reinvestment Act, restores the higher limits in place for Fannie and Freddie during much of 2008, allowing the companies to buy or guarantee loans of up to 125 percent of the median home price in high-cost areas. Congress instituted temporary increases in the $417,000 conforming loan limit in high-cost areas last year. A sunset provision brought the limit back down to 115 percent of median home price, with a cap of $625,500, on Jan. 1 While lawmakers had hoped that the secondary market for mortgage loans would be restored to health by now, problems continue, making jumbo loans costlier than those eligible for purchase or guarantee by Fannie and Freddie. The new stimulus bill stipulates that loan limits are to be the h...