Act now to prevent FHA loan limits
Wednesday, September 28, 2011
Reducing mortgage liquidity at this time will prevent the real estate market and the overall economy from healing and stabilizing, according to the Orlando Regional REALTOR® Association.
In a written appeal to Rep. Daniel Webster (R-Fla), ORRA encouraged the lawmaker to act to extend the current conforming loan limits for FHA and government-backed mortgages at Fannie Mae and Freddie Mac.
Send a message to your legislators today asking for extended loan limits.
The REALTOR® Action Center makes it easy to do.
What's at Stake
Loan limits are set to decrease on October 1, which will lessen the availability of mortgage credit for hundreds of thousands of responsible and credit-worthy American families.
FHA and GSE are an important source of mortgages for homebuyers who are challenged by today's extremely tight lending conditions. In Orlando, for example, approximately 20 percent of homebuyers relied on an FHA mortgage to complete an existing-home purchase during the month of August.
Limiting mortgage availability will limit the number of homeowners who can secure a mortgage, thereby limiting the very home sales that are needed to end the housing crisis.
Housing Market Impact
It's not just Orlando that would feel the effects; it's nationwide. The more than 200 U.S. counties affected by the changes for the GSE conforming loan limits contain 27 percent of all owner-occupied homes in the United States. The more than 600 counties affected by the changes in the FHA loan limits contain 59 percent of all owner-occupied homes.
If families can't sell their homes and others cannot buy, the inventory of homes for sale will grow. Expanding the current inventory will further depress housing prices. If families cannot obtain financing to buy, sellers will need to further reduce the prices on their homes. This will delay our housing recovery, and erode the wealth of American families.