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Senate Passes FHA Reform New FHA Loan
Limit up to $729,750
The Senate has passed a Federal Housing
Administration (FHA)
modernization bill by a 93-1 vote that raises the
FHA loan limit up to $729,750 in high cost areas and
lowers the minimum down payment requirement from
3.0% to 1.5%.
During the debate, Senator Tom Coburn, withdrew his
amendment to restore a cap on the number of reverse
mortgages the FHA can insure. An amendment to place
a moratorium on the implementation of risk based
pricing at the FHA was agreed to by unanimous
consent.
The moratorium is a blow to the Bush administration,
which contends that risk based pricing is critical
to the health of the FHA mortgage insurance fund.
Meanwhile, mortgage lenders say they expect the
increase in the FHA loan limits to lead to an
explosion in FHA originations.
The House passed an FHA bill earlier this year, which means House and
Senate banking committee leaders will have to meet
in conference to agree on the final provisions of
the FHA bill. A House-Senate conference is not
expected until early next year. |
NATIONWIDE
MORTGAGE LENDER
