Fannie, Freddie and FHA Loan Limits Will Be Extended Through 2010

The maximum $729,750 conforming loan limit is due to expire on Dec. 21, which would drop the loan limit down to $625,500. This is leaving lenders in a bit of a holding pattern as to whether they can approve balances above $625,500 for mortgages they’re dealing with now.

Good news to keep things stable: The Committees on Appropriations agreed this week in a Continuing Resolution (CR) to maintain housing loan limits for FHA, GSE and HECM single-family mortgages at $729,750 through end of calendar year 2010. And, Congress passed a stopgap funding plan that the loan limit extension is attached to — it just needs President Obama’s signature, which is expected today, if not early next week.

That means FHA loans, and GSE (Fannie Mae and Freddie Mac) loan limits will stay the same for another year.

Earlier this week, Treasury Secretary Shaun Donovan was urging Congress to approve the conforming loan limit measure, which is part of his three-part proposal to help heal the housing market:

• Extend the First Time Homebuyer Credit, with strong anti-fraud measures
• Extend Loan Limits for Mortgage Loans
• Secure Financing for the Housing Trust Fund