In case you haven't heard, lawmakers have voted to restore loan limits for the Federal Housing Administration to pre-Oct. 1 levels, but the reprieve won't apply to Fannie Mae and Fannie Mac.
House and Senate leaders signed off on a conference report for a "minibus" appropriations bill that included language restoring FHA's ability to insure loans of up to $729,750 in high cost markets through 2013.
Because the minibus appropriations package also contains a continuing resolution to avoid a government shutdown and continue federal operations until Dec. 16 -- or until Congress completes nine remaining appropriations bills -- lawmakers didn't dally in approving it.
So, while this is good news for both home buyers and sellers in the South Bay and Westside, it really doesn't make any sense. Didn't we learn anything from the housing crisis?
FHA loans allow for lower down payments, lower credit scores, and a host of other factors that don't add up to as tough a standard as let's say the 10% down "conventional" loans require. So, while this is good news because it will help to shore up prices in the mid $700's and everything underneath, it should have been extended to Fannie-Freddie loans as well. Although in the current political climate, anything that helps housing is better than the alternatives.