U.S. House Passes bill that allows for higher conforming loan limits
The U.S. House of Representatives voted this afternoon on H.R. 1461, Federal Housing Finance Reform Act of 2005. This legislation is intended to strengthen the regulations and oversight of Fannie Mae, Freddie Mac, and FHA, also known as the Government Sponsored Enterprises (GSE).
Included in this legislation is the High-Cost Conforming Loan Limit provision. This provision will increase the conforming loan limit, currently $359,650, to the median home price of a Metropolitan Statistical Area (MSA) if the median home price of the MSA is above the national conforming loan limit. The new conforming loan limit for a high-cost MSA would be set at its median home price, but capped at 150% of the national conforming loan limit, or currently $539,475.
The amendment introduced by Representative Garrett from New Jersey would have stripped the high-cost conforming loan limit provision from H.R. 1461. The Amendment was handily defeated!
What this means for you, the homebuyer, is that since ‘conforming’ loans carry lower rates, your mortgage payments (on a newly originated loan) will be lower and many, many more people will be able to qualify for these loans. As you see above, that’s a nearly $200k increase, which will provide many more opportunities for homebuyers.
