Limit on Jumbo Loans Won't Be Extended, for Now

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jumbo loan extensionThe elevated conforming loan limit for mortgages guaranteed or insured by the government will expire on Oct. 1, according to three congressional staffers, but another chance to extend them will come later this year.

Congress raised the limit to as high as $729,750 in 2008 as the private market froze and financing for larger mortgages became unavailable. On Oct. 1, the limits will expire and drop to $625,500 in the most expensive areas, mostly affecting the West and East Coasts. According to Standard & Poor's, there are around 110,000 nonconforming mortgages in the nation between $625,000 and $729,000 - about 2% of total jumbos.Two bills to extend the limits, one introduced in the House and another in the Senate, were never voted on. A spokesman for Rep. John Campbell (R-Calif.), who co-sponsored the House bill, said an extension did not make it into a short-term spending bill the House will vote on next week.

"We are focusing all of our effort and attention on making sure that a temporary extension of the current conforming loan limits is included in an omnibus spending bill that it appears the House and Senate will consider late this year," Campbell's spokesman said.

How will the limit drop affect the housing market? Read the full story at HousingWire.

Also see:
Jumbo Loans: Will the World End if They Go Away?


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