Barney Frank For Keeping $729,750 Loan Limits Permanent

• July 11th 2011

by UrbanTurf Staff

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Rep. Barney Frank (D., Mass.) does not agree with the Obama administration when it comes to lowering the limits on government-backed loans.

The Wall Street Journal recently reported that Frank is in favor of keeping the maximum size of these loans backed by Fannie Mae and Freddie Mac at the current level of $729,750.

In February, the administration issued a report for how to reduce government support of the mortgage market. One recommendation from that report is that, on October 1, the temporary increase on conforming, government-backed home loan limits should expire, reducing the limit to $625,500 in the DC area, and to lower amounts in other parts of the country. The Housing and Economic Recovery Act of 2008 upped the limit on conforming home loans (the maximum size of a loan Fannie Mae and Freddie Mac can guarantee) in more expensive home markets like the DC area from $417,000 to $729,750 because the availability of those size loans in the private market all but disappeared. The insurance that loans up to $729,750 would be backed was reinstated in the economic stimulus bill passed at the start of the Obama administration, and was renewed again last year.

From the Journal:

“The same level can’t be right for the whole country,” Mr. Frank told reporters at a press conference. He also argued that, with the housing market and broader economy still weak, “it would be an especially bad time economically to [reduce limits].”

For more about how the lowering of limits would affect the local housing market, click here.

This article originally published at http://dc.urbanturf.production.logicbrush.com/articles/blog/barney_frank_for_keeping_729750_loan_limits_permanent/3785.