NAHB’s ongoing efforts to extend the current conforming loan limits, which are due to expire on Oct. 1, received a boost this week when CQ Today reported that Rep. Barney Frank (D-Mass.) said the Administration has changed its stance on the issue and would now support a one-year extension of the current home loan guarantees.
Reps. John Campbell (R-Calif.) and Gary Ackerman (D-N.Y.) on July 15 introduced legislation (H.R. 2508) that would provide a two-year extension. In addition, pending legislation by Reps. Gary Miller (R-Calif.) and Brad Sherman (D-Calif.) — H.R. 1754 — would provide a permanent extension. Despite these positive developments on this issue, extending the mortgage limits is far from a done deal, with many conservative lawmakers in opposition and in favor of reducing the government's involvement in housing and potential risks to taxpayers. If Congress fails to act, the national ceiling for Fannie Mae, Freddie Mac and Federal Housing Administration home loans will drop from $729,750 to $625,000. A drop in some mortgage loan limits would reduce housing demand and place downward pressure on home prices in major markets across the country, exacerbating the current housing downturn and endangering the fragile economic recovery, according to NAHB economists. The CQ Today article also cited NAHB CEO Jerry Howard, who predicted an extension would come to pass if voted on in the House. "It's really not a partisan issue," said Jerry. "It's a geographic issue, and Republicans in high-cost areas are going to have to recognize their constituents." See NAHB's recent study on the impact of loan limit changes for 2011. Contact: Scott Meyer (800-368-5242, x8144).