Are FHA Loan Limits Increasing $100,000?
Buried at the bottom of a New York Times article on the trouble FHA housing loans are in is this tidbit, Congressman Barney Frank of Massachusetts wants to raise the lending limits of an FHA loan $100,000.
A few weeks ago, Congress extended the higher lending limits for another year. Representative Barney Frank, the Massachusetts Democrat who is chairman of the House Financial Services Committee, said in an interview that he planned to introduce legislation next year raising the maximum F.H.A. loan by $100,000, to $839,750. via the NY Times
Now I do not know about you, but this is another level of madness that fits right in the pattern of how are Federal Government has been running lately. They have a program that is losing money hand over fist, the FHA is close to needing a handout in the first time in it’s history, and they are thinking of increasing the risk to the program substantially.
Barney Frank has done this before by forcing Fannie Mae and Freddie Mac to be an instrument of social change instead of fulfilling it’s mandate to be just a financial institution. Now it is a shell of it’s former self and being run by the government. The FHA is a fully run government entity that now is being used to prop up a fragile housing market in many cities by making loans that banks will not.
Let us hope that it also does not turn into a money pit that is propping up values and distorting the market. Oh wait, I think we are too late for that.
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Comment by Portland Real Estate on 20 November 2009:
Although I agree on most points, I would like to point out that most of the banks that are being propped up got into the trouble that they are in all by themselves, then expected the government to bail them out. Though personally I think that we should just do the capitalistic thing and let them crash. No business should receive government subsidies, its just not good capitalism.
-Tyler
Comment by Stop Mortgage Foreclosure on 20 November 2009:
The pit we’ve gotten ourselves into just seems to be getting deeper and deeper. Is the government going to end up owning the loans to every house in the US?
Comment by Gainesville Real Estate on 22 November 2009:
I’m speechless.
Pingback by Real Estate Investing Links for November 25, 2009 on 25 November 2009:
[...] Are FHA Loans Increasing $100,000? [...]
Comment by Bob on 25 November 2009:
Talk about an ambiguous message. One part of the article defines potential changes to make the FHA loans less available, or should I say safer, and then you have a person suggesting raising the limit so that they cover loans that at are a higher risk level.
Very confusing.
Comment by Charlotte Appraiser on 29 November 2009:
How many Charlotte homes will be able to quality for FHA insurance? The median home price in Charlotte is $180,000. Charlotte NC home that are under the $100,000 price point are in below average condition that will not quality for FHA insurance (MPR). So this dis-qualifies about 85% of the Charlotte homes. As a Charlotte Appraiser 70% of my business comes from FHA insured loans.