The recent upheaval in global credit markets has led to a significant lack of liquidity throughout the mortgage industry. One exception is the segment of loans that are eligible for purchase by Fannie Mae and Freddie Mac (the GSEs). The GSEs are able to facilitate a continuous and efficient flow of capital, benefitting lenders and, ultimately, borrowers.
However, borrowers seeking to purchase or refinance homes that fall outside of the GSEs' eligibility requirements have had to bear the brunt of the liquidity crisis, as the lack of a properly functioning secondary market for nonconforming mortgages has led to either much higher lending rates or no financing options whatsoever for some borrowers.
It is against that backdrop that Congress decided to temporarily increase the GSE conforming loan limits as part of the Economic Stimulus Act of 2008, an MBA supported policy. While the temporary increase of GSE conforming loan limits is positive legislation, MBA continues to believe that enactment of GSE oversight reform legislation is important to restoring confidence in the mortgage market and ensuring its health in the future.
Under the Economic Stimulus Act of 2008, the increased loan limits apply for GSE mortgages originated from July 1, 2007 through December 31, 2008, which may be purchased by the GSEs anytime during their mortgage terms.
For information on GSE limits by area, click here to be directed to HUD's Mortgage Limit Web page.
|Issues Update |
|Date || |
|12/1/2008 ||Joint Letter, Trade Urge Congress Not to Allow Conforming Loan Limits to Fall |
|6/4/2008 ||OFHEO Map - Maximum Temporary Jumbo Conforming Loan Limits under the Recovery Rebate and Economic Stimulus for the American People Act:Counties with Different Limits under the Temporary Program |
|5/22/2008 ||MBA Testimony: Impact on Homebuyers and Housing Market of Conforming Loan Limit. |
|2/21/2008 ||MBA Policy Correspondence: Letter to Director Lockhart and Commissioner Montgomery on Temporary Increases in FHA and GSE Loan Limits |
|2/15/2008 ||MBA Policy Paper: Economic Stimulus Package Increases in FHA and GSE Loan Limits |