Sam Farr Response to Extending Higher Loan Limits

I wanted to share this with you because I am doing what I can to extend loan limits and give people an opportunity to purchase a home that suites their needs.

Sam Farr Represents California

August 16, 2011

Kristen Jurevich

800 San Benito St Ste C

Hollister, California 95023-4868

Dear Kristen:

Thank you for contacting me about extending higher loan limits for borrowers who use Fannie Mae, Freddie Mac and Federal Housing Administration (FHA) loans.  Fannie Mae and Freddie Mac, also commonly referred to as Government Sponsored Enterprises (GSEs), and the FHA provide affordable mortgage loans for homebuyers.  I can assure you that I support making the current loan limit of $729,750 permanent and I remain committed to supporting policies that will help put our economy and housing market back on solid financial footing.

In high cost areas like our Central Coast, GSE and FHA loans are an important option for many of our neighbors.  Along the Central Coast and across the nation, Americans are still dealing with the consequences of the housing meltdown that left close to one in four families with a mortgage underwater at the end of 2010.  I strongly believe that Congress must support our families and create policies that get our nation’s economy back on track.

In 2008, in the midst of the economic recession, Congress and President Obama worked together to pass the Economic Stimulus Act of 2008 (H.R. 5140).  Included in this legislation, which I voted for, was a provision that temporarily increased the mortgage loan limits for the GSE’s and FHA to $729,750.  The loan limit was increased to make homeownership a reality for many Americans who would not normally be able to afford a mortgage in high cost areas like the Central Coast.  GSE and FHA loans generally carry lower interest rates and lower down-payments than loans from traditional banks, which make them appealing for many homebuyers.  These temporary limits are set to expire on October 1, 2011 and if they do expire, it will make it more difficult for homebuyers to afford real estate in high cost areas like California.

Solving the current housing crisis is a key component to our economic recovery.  Therefore, you will be pleased to know that I am a cosponsor of HR1754, the Preserving Equal Access to Mortgage Finance Programs Act that would permanently set the conforming loan limit for Fannie Mae, Freddie Mac and FHA at $729,750.  I have also cosponsored HRes 25 expressing the sense of Congress that the current mortgage deduction not be restricted further.  Another bill I cosponsored is H.R. 2508, the Conforming Loan Limits Extension Act to extend the current conforming loan limits for an additional two years.  I have also signed two letters to the House Appropriations Committee requesting they include language extending the higher loan limits for an additional year in the FY12 bill that funds the Department of Housing and Urban Development.

A healthy housing market will help our economy recover.  Please be assured of my continued support for extending the higher loan limits.



Member of Congress


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