Federal housing officials may finally be ready to stand up and be counted in industry's long-standing effort to raise Federal Housing Administration loan limits.
To date, the Department of Housing and Urban Development has remained above the fray, saying only that it would support industry attempts to persuade Congress to up the ante on FHA-insured loans.
But at the National Association of Home Builders annual convention this week in Orlando, HUD Assistant Secretary Charles Williams went a step further by specifically calling on the 120,000-member group to pitch lawmakers on the idea of a single nationwide maximum FHA loan amount.
Currently, the ceiling on FHA loans is $362,790 in 88 high-cost markets, nearly a $50,000 jump from the 2005 maximum. The floor is $200, $160 in most everywhere else except some 450-odd counties where it is somewhere in between.
The conforming loan limit -- the ceiling on loans which can be purchased or securitized by Fannie Mae and Freddie Mac -- is $417,000 everywhere except Alaska, Hawaii, Guam and the Virgin Islands, where it is 50 percent higher.
Fannie Mae and Freddie Mac are the two huge mortgage machines chartered by Congress to keep the money flowing to housing by buying loans from primary lenders and selling them to investors throughout the world.
But builders, brokers and lenders in places like California, Washington, D.C., and the New York City area complain that even the Fannie-Freddie limit isn't high enough to serve their customers.
Hinting that HUD itself may even be willing to ask Congress to adopt one ceiling for all jurisdictions, Williams told a convention session that the current FHA ceilings are "too low to reflect the rising cost of (building) materials."
Speaking to the NAHB's Housing Finance Committee, and substituting for FHA Commissioner Brian Montgomery, who was ill, he said the artificially low loan caps "keep us out of the mainstream home building market."
Published: January 12, 2006
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