Mortgage

Is it time to raise the limit for jumbo housing loans?

It's been 10 years since the maximum conforming mortgage limit was set at $417,000
  • The Housing and Economic Recovery Act (2008) forbade any increase in the conforming loan amount until U.S. home prices had recovered to pre-crisis levels.
  • Now they have. What are the options?

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The maximum conforming mortgage limit has been stuck at $417,000 for 10 long years. There is an upward exception for “high cost” counties -- all 234 of them. The other 2,910 counties are on their own, especially high-cost “islands” within them. In the great spasm of sometimes beneficial and sometimes punishing legislation following the credit bubble, the Housing and Economic Recovery Act (2008) forbade any increase in the conforming loan amount -- until U.S. home prices had recovered to pre-crisis levels. Now they have. Will the conforming limit rise now? The arguments for -- and against -- raising the limit Remember that Fannie Mae and Freddie Mac -- the “GSEs,” government-sponsored enterprises -- are still in conservatorship by the Treasury. The political right hates them both, and the left generally would limit the GSEs to helping lower wage-earners. There is no alternative to the GSEs because they work so well, yet politics is in denial. Why should...