FHFA Acting Director Edward DeMarco announced his intention to lower the limits in September. Despite the near-universal condemnation of industry groups and questions from lawmakers about his authority to do so, DeMarco has remained steadfast in his intention to drop the limits.
Currently, the maximum loan limit for Fannie and Freddie is $417,000 in most of the country and $625,000 in more expensive markets. Under the FHFA proposal, those limits would be dropped to $400,000 and $600,000 respectively.
Before implementing the plan, however, the FHFA has decided “that inviting public input on potential operational and technical issues associated with the planned decrease in loan purchase limits would benefit any final decision,” according to a Monday news release.
There’s definitely been unofficial public comment on the plan. In October, more than a dozen industry groups sent a joint letter to DeMarco slamming the proposed reduction.
““We believe such changes at this time would have a very disruptive impact on the availability of affordable housing credit, on our housing recovery and our economy as a whole,” the letter stated. “Not only is lowering loan limits bad for housing, we question to what extent FHFA’s authority would allow for such a change.”
Those wishing to submit comments on the plan should write to the Federal Housing Finance Agency, Office of Policy Analysis and Research, 400 7th Street, SW, Ninth Floor, Washington, DC 20024, or email loanlimitinput@FHFA.gov
. Comments must be received no later than March 20.
The Federal Housing Finance Agency is asking for public comment on its plans to reduce the maximum loan sizes purchasable by Fannie Mae and Freddie Mac.