By Vicki Needham - 11/26/13 06:04 PM EST
Housing industry advocates and lawmakers expressed support for a top housing regulator's decision to maintain current loan limits.
The Federal Housing Finance Agency (FHFA) said Tuesday that the 2014 maximum conforming loan limits for mortgages acquired by Fannie Mae and Freddie Mac will remain at $417,000 for most areas of the country.
Loan limits increase to upward of $625,000 in some higher-priced cities such as Los Angeles and New York.
The decision should relieve widespread concerns on an off Capitol Hill that a change in the loan limits would collide with the implementation of a slew of new mortgage rules next year under the Dodd-Frank financial law.
Rep. Carolyn Maloney (D-N.Y.), ranking member of the House Financial Services Subcommittee on Capital Markets and Government Sponsored Enterprises, who penned a letter with 65 other House members last month, said she is "very pleased that FHFA heeded my, and other members’, calls to maintain the current size of home mortgages that Fannie Mae and Freddie Mac can finance.”
“Not only did FHFA find that the current levels were justified, it also found that higher limits were appropriate in an additional 18 high-cost counties across the country," she said in a statement.
So that should provide homebuyers in expensive markets with better access to the financing, she said.
"With the housing market slowly picking up in some areas of the country, now would have been exactly the wrong time to make buying a home even more difficult."
David Stevens, head of the Mortgage Bankers Association, said his group was one of many that implored acting director Edward DeMarco to hold off on adjusting the loan limits, especially while mortgage servicers were busy making so many other changes.
Stevens said any change could have created operational chaos for mortgage servicers who have devoted most of their resources to preparing for the new qualified mortgage rules, among others, that will start up in January.
“There is already enough turbulence in the regulatory environment for mortgage lending," said National Association of Realtors President Steve Brown in a statement.
"Lowering loan limits at this time would create even more confusion and uncertainty, and we would run the risk of reversing the progress that’s been made in the economic recovery."