FHA LOAN LIMITS

On January 25, 2008, the Bush Administration and the House of Representatives announced an agreement on an Economic Stimulus package to address the economy.  Included in this initiative are two housing related components: 

• A permanent increase in FHA loan limits
• A temporary increase in Fannie and Freddie's conforming loan limits 

As discussed in the President's State of the Union address on January 28th, FHA is a significant component of the Administration's efforts to revitalize the housing crisis that is being felt in many areas across the country.  These developments are exclusive of the FHA Modernization legislation which remains on schedule to be passed in the first quarter of this year.

The United States Senate is reviewing the Economic Stimulus package this week and next.  While view changes to the FHA loan limits as a high probability, until the Congress acts and the President signs the authorizing legislation, loan limits are status quo.  I expect a Stimulus package to be enacted in February.