Bargainers agree to raise size of FHA-backed loans
WASHINGTON (AP) — Congressional bargainers have agreed to increase the size of mortgages insured by the Federal Housing Administration in a compromise being hailed by the housing industry but criticized by conservatives.
Under the deal by House and Senate negotiators, the FHA would be able to insure mortgages worth up to $729,750 in expensive regions of the U.S. for the next two years. By law, that ceiling had dipped to $625,500 on Oct. 1.
However, the bargainers would not increase the current $625,500 limit on mortgages that can be backed by Fannie Mae and Freddie Mac, the government-controlled mortgage giants, and by the Department of Veterans Affairs.
Housing industry officials said the FHA language would help the limp housing market. Conservatives opposed it, saying the government should reduce its involvement in housing.