FHFA Still Pushing To Cut Fannie & Freddie Loan Limits, Despite Concern From NAR, Congress
In August, the Federal Housing Finance Administration (FHFA) which serves as the conservator of Fannie Mae and Freddie Mac, announced it was considering a reduction in the maximum loan amounts that Fannie Mae and Freddie Mac can purchase. The proposal could take effect Jan. 1, but there is talk it could be pushed to the spring. The loan limits are set at $417,000 for the majority of the country but can rise to $625,500 in some high-cost areas, such as our mountain resort areas.
NAR, along with the Mortgage Bankers Association, the National Association of Home Builders, and others, urged the FHFA in a recent letter to regulators to delay its proposal to reduce the loan limits. NAR has argued that the reduction in the loan limits could hamper mortgage activity. “Please do not further complicate this time by changing the mortgage loan limits at this time,” the letter states. It also questions whether the FHFA has the legal authority to do so.
While the FHFA believes that reducing the loan limits will encourage growth of private capital in the market, NAR is concerned that may not be the case. Thirteen Senators have now sent a letter to the FHFA indicating their opposition to the loan amount reductions, and questioning the authority of the FHFA to make those decisions. Some in Congress believe it is Congress’ responsibility to decide the fate of FHFA loan levels.
Fannie Mae and Freddie Mac Maximum Loan Limits for Mortgages Acquired in Calendar Year 2013
Metro Areas (Boulder, Denver, El Paso/Colorado Springs)
One Unit $417,000
Two Units $533,850
Three Units $645,300
Four Units $801,950
Mountain Areas (Eagle/Vail, Pitkin/Aspen, Routt/Steamboat, Summit/Breckenridge
One Unit $625,500
Two Units $800,775
Three Units $967,950
Four Units $1,202,925
