Congress Approves Higher FHA Loan Limit

Congress has approved the conference report on the Consolidated and Further Continuing Appropriations Act, 2012 (H.R.2112), the consolidated appropriations bill that funds a variety of federal agencies and includes a continuing resolution that keeps the government operating until Dec. 16.

The legislation includes an amendment that raises the high-cost loan limit for Federal Housing Administration (FHA)-insured mortgages from $625,5000 to its previous ceiling of $729,750.

The bill also provides funding for several programs administered by the U.S. Department of Housing and Urban Development (HUD). H.R.2112 earmarks at least $2.95 billion for the Community Development Block Grant program, $1 billion for the HOME Investment program and $125 million for housing counseling. The counseling funds contain $45 million for HUD's counseling programs (which include reverse-mortgage and pre-purchase counseling, in addition to foreclosure counseling) and $80 million for Neighborworks America's National Foreclosure Mitigation Counseling Program.

The House has approved H.R.2112 by a 298-121 vote, and the Senate passed the measure by a 70-30 vote.

In advance of the vote, Sen. Bob Corker, R-Tenn., a member of the Senate Banking Committee, released a statement calling the move to raise the FHA's loan limits "unconscionable."

"Raising the loan limits at FHA only, an unprecedented move, will simply drive more business into Ginnie Mae securities and put the FHA at even greater risk of losses to taxpayers," Corker said. "If we cannot even take this simple step, we risk crowding out the private sector for years to come."

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