Fannie, Freddie plan targets jumbo limits

Ceiling in high-cost markets would be cut to $625,000 this year

A plan unveiled by the Obama administration today to wind down Fannie Mae and Freddie Mac could take years to implement, but at least one aspect would kick in this year: lowering the ceiling on the jumbo conforming loan limit in high-cost markets from $729,750 to $625,500.

The California Association of Realtors voiced its objections to that aspect of the plan, saying reduced government presence in the mortgage market would raise the cost of homeownership and make mortgages less available.

"Congress needs to understand that during economic downturns, the housing market needs government involvement to ensure capital stability," said CAR President Beth L. Peerce in a statement. History has shown "the private market is incapable and unwilling to step in during the hardest of times and meet the demands of the nation’s homebuyers."