Good news. In a compromise negotiated today, Congress agreed to restore the $729,750 conforming loan limit for FHA mortgages. The extension will continue until December 31, 2013 and applies to high cost areas including all of Los Angeles and Orange County. We were not able to restore the $729,750 limit for Fannie Mae and Freddie Mac mortgages.
As a result of the efforts of several of us a few years ago the Fannie and Freddie limit was permanently increased to $625,500, for high cost areas such as Los Angeles and Orange County. We were able to get a temporary increase for high cost areas to $729,750 for FHA, Fannie and Freddie mortgages, but that temporary increase expired September 30, 2011.
I will continue to fight for a permanent increase for Fannie Mae, Freddie Mac and FHA to $729,750 for high cost areas.
The compromise negotiated today is critical to the San Fernando Valley and the greater Los Angeles area. Some purchasers prefer FHA to Fannie and Freddie and some the opposite, but virtually every transaction that would have closed as a Fannie or Freddie loan can now close as an FHA loan. Moreover, it is FHA that allows for a lower down payment, and restoring the $729,750 limit for FHA probably does more to provide a vehicle for all types of home buyers than anything else we could have passed.
– BRAD SHERMAN, Member of Congress