The Housing Chronicles Blog: Higher conforming loan limits far from a done deal

Tuesday, January 29, 2008

Higher conforming loan limits far from a done deal

Although the well-publicized, bi-partisan economic stimulus package has passed the House of Representatives intact, it's a different story in the Senate. Annoyed at Speaker Nancy Pelosi for caving on extending unemployment benefits and a temporary rise in food stamps, the Senate version being proposed includes additions that don't sit well with the Bush Administration. Also of note is that the Senate version includes no provisions to raise conforming loan limits, even temporarily. From a New York Times story:

Both plans focus on personal tax rebates and incentives for businesses intended to spur spending. The Senate plan also extends unemployment benefits for 13 weeks beyond the 26 weeks currently provided in most states — at a cost of $10 billion in 2008.

And it drops a component of the House package that would raise the limit on so-called “conforming” mortgages that can be insured by the Federal Housing Administration or bought by Fannie Mae and Freddie Mac, the government-sponsored finance companies — a step that would help homeowners in expensive markets refinance their loans...

Ms. Pelosi had initially sought an extension of jobless benefits and an increase in food stamps, but dropped those demands in favor of an agreement to provide $28 billion in one-time payments to more than 35 million families that would not otherwise have qualified for income-tax rebates.

But on Tuesday, Ms. Pelosi said that her own support for some of the proposals being floated in the Senate was secondary to the urgent need to secure a short-term stimulus plan, without vastly increasing the national debt.

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