FHA Mortgage Loan Limits To Rise Again

WASHINGTON -- 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 the most expensive regions of the U.S. for the next two years. The ceiling had been raised to that level during the financial crisis, but by law it dipped down to $625,500 on Oct. 1.

However, in a bow to conservatives, the bargainers would not increase the current $625,500 limit on mortgages that can be backed in expensive communities by Fannie Mae and Freddie Mac, the government-controlled mortgage giants, and by the Veterans Affairs Department.

Realtors and home builders had lobbied hard to raise the loan limits for all four entities, arguing that the last thing the country's stubbornly weak housing market needs is stricter limits on government-backed mortgages. They were backed by members of Congress of both parties from areas where housing costs are high, like Southern California and New York.

"We'd have liked broader language, but the FHA is still an important part of the puzzle," Jamie Gregory, a lobbyist with the National Association of Realtors, said Tuesday.

'Beyond Ridiculous'

Conservatives and a majority of House Republicans oppose the increase, saying the government should reduce its involvement in subsidizing housing in hopes that the private market would step up.

In a written statement, the president of the conservative Club for Growth called increasing FHA's loan limits "beyond ridiculous" and said his group would note how lawmakers vote on the issue when they rate members of Congress seeking re-election. He said raising the limits does the opposite of reducing the federal role in housing markets -- something that many conservatives and the Obama administration say they want to strengthen the private market and protect federal taxpayers.

It has so far cost the government about $170 billion to rescue Fannie and Freddie, which nearly collapsed in 2008 because of risky loans in their portfolios.

The size of loans that federal agencies can back is based on a formula that includes a region's median housing cost. More than a fifth of the country's roughly 3,100 counties would be affected by the higher FHA loan limits.

Helping Buyers With Small Down Payments

FHA insurance is often used by buyers who put down small down payments. The agency has insured more than 40 million homes since it was established in 1934, and last year three quarters of those it insured were first-time buyers.

"It's good news for the more than 600 counties that faced loan limit decline," said Robert Dietz, an economist for the National Association of Home Builders. "FHA is important for first-time homebuyers, so that will help support housing demand."

The provision was included in a bill financing the departments of Housing and Urban Affairs, Commerce, Justice, Transportation and several other agencies for the rest of the government's fiscal year, which began Oct. 1. It would also keep all other federal agencies functioning through Dec. 16 as lawmakers continue working on permanent spending bills.

The Democratic-run Senate had voted to increase the loan limits in its housing bill, but the version approved by the Republican-led House left the ceilings alone.

The House and Senate are expected to approve the overall compromise legislation later this week.

Also see:
Fannie, Freddie Execs Score $100 Million in Bonuses

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Buyer's Market: Homes for $75,000
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FHA Mortgage Loan Limits To Rise Again

As home prices continue to look for a bottom and our economy slogs along at a snail's pace, people are understandably leery about committing to a home purchase. But living within your means as a homeowner doesn't necessarily mean settling for a mediocre house.

As these places demonstrate, a fairly modest sum can go pretty darn far in the way of dwellings these days. Click through our gallery to check out how much house $75,000 buys across the country, and see if you don't agree.

Location: San Antonio, Texas
Price: $75,000 
Beds/Baths: 2/1
Sq Ft: 993

This charming house may be a bit on the wee side, but it has everything you need, plus some neat, cheery landscaping and access to the community swimming pool. 

See the listing and more photos of the home.

The home's airy open floor plan compensates for its small size. 

Location: Atlanta, Ga.
Price: $75,000
Beds/Baths: 1/1
Sq Ft: 623

A unit in this Atlanta building, touted as "historic" in its listing description, recently underwent a price cut that makes it quite a deal. The home features hardwood floors, high ceilings and puts you close to nearby retail and restaurants.

See the listing for more details. 

While the building may have seen its fair share of days, the condo's finishes and decor render the dwelling positively modern. 

See the listing for more details. 

See more $75,000 homes in Atlanta, Ga.

Location: Omaha, Neb. 
Price: $75,000
Beds/Baths: 3/1
Sq Ft: 878

This modest ranch house in Omaha offers three bedrooms, a one-car garage and mature trees dotting its perimeter.

See its cute interior

The home has a decent-sized kitchen, basement and laundry room.

See photos of the house

See more $75,000 homes in Omaha, Neb.

Location: Fairview Park, Ohio
Price: $75,000
Beds/Baths: 2/1
Sq Ft: N/A

Boasting a recently renovated kitchen, this cottage-style ranch house delivers a porch and garage, along with a spanking-new exterior. 

See a slideshow of the home

The neat, well-proportioned interior was recently refurbished, with the kitchen receiving the most attention. 

See a slideshow of this home

See more $75,000 homes in Fairview Park, Ohio

Location: Kearns, Utah
Price: $75,000
Beds/Baths: 3/2
Sq Ft: 1,176

This starter home gives you more size and one more bathroom than you might expect from its peers on the market. 

See photos of this home

In 2005 the home underwent a makeover with new paint and flooring, along with an updated kitchen. Why such a modest price tag, you ask? Like many bargain listings, this one's a short sale. 

See the listing for details. 

See more $75,000 homes in Kearns, Utah

Location: Cheektowaga, N.Y. 
Price: $75,000
Beds/Baths: 3/2
Sq Ft: 1,731

It's a rare listing that offers 1,731 square feet for just $75,000. In addition to its generous interior space, this home also has a garage. 

See the listing for details. 

A fenced, lush backyard is also part of the deal. Just the place to let the dogs run free!

See the interior

See more $75,000 homes in Cheektowaga, N.Y.

Location: Des Moines, Iowa
Price: $75,000
Beds/Baths: 2/2
Sq Ft: 720

We'll let the listing do the talking on this one:
"Take a drive down this nostalgic, brick paved, tree-lined street and you'll discover the cutest, most affordable home on the market."

While it may not be the most adorable , there's no denying that this sucker is pretty darn cute. 

The interior is cute too

The home puts you close to downtown, two state parks and a bike path, according to the listing. Having undergone renovations over the last few years, the interior boasts refurbished windows, hardwood floors and kitchen tile, along with a fresh coat of paint. 

See a slideshow of the listing

See more $75,000 homes in Des Moines, Iowa

Location: Caldwell, Idaho 
Price: $75,000
Beds/Baths: 3/2
Sq Ft: 1,395

In addition to its overall bang-for-your-buck shine, this cozy single family offers 100% financing, jacking up its score on the bargain meter even further. 

See the listing for details. 

The family room and kitchen feature vaulted ceilings that enhance the open-floor plan's airy feel. 

See photos of this listing

See more $75,000 homes in Caldwell, Idaho

Location: Tampa, Fla. 
Price: $75,000
Beds/Baths: 2/2
Sq Ft: 1,094 

This remodeled villa-style home just had its price slashed by $5,000, as the owner and bank continue to try and make a successful short sale. Community facilities include a playground, racquetball courts and tennis courts. 

See the listing for details. 

The listing says it all: "Short Sale -- Where there's a Bill, there's a way!" If that were only true... 

See the listing for details. 

See more $75,000 homes in Tampa, Fla.

Location: Las Vegas, Nev.
Price: $75,000
Beds/Baths: 4/3
Sq Ft: 1,868 

Clocking in at just $40 a square foot, this home's low price is by no means unheard of in a market many consider to be ground zero of the housing bust. The interior features both a living room and family room, while the property's compact plot boasts a fenced backyard along with neat landscaping. 

See a gallery of this home

The gleaming kitchen has all-new appliances,  granite countertops and a storage-filled peninsula. 

See the listing for details

See more $75,000 homes in Las Vegas, Nev.

Location: Oklahoma, Okla. 
Price: $75,000
Beds/Baths: 2/1
Sq Ft: 858

This charming bungalow furnishes you with the basics at a fraction of what they cost in many other states. 

See the listing for details. 

Take respite from the frigid Oklahoman winters by cozying up in this snug living room. 

See the listing for details. 

See more $75,000 homes in Oklahoma, Okla.


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