Dear Mrs. Lathrop:
Thank you for contacting me regarding homeownership assistance programs. I appreciate the time you took to write and welcome the opportunity to respond.
The Federal Housing Administration (FHA) plays an important role in insuring home mortgages for those in underserved communities. It is critical that FHA programs be reformed to provide more homebuyers and borrowers looking to refinance with the opportunity to obtain an FHA loan. These opportunities are especially important in states, such as California, where the cost of housing is high. For homebuyers faced with jumbo loans subject to high interest rates, raising the government-sponsored enterprise (GSE) conforming loan limit will bring more liquidity to the market and lower monthly interest rate costs.
On February 13, 2008, the President signed the Economic Stimulus Act of 2008 (H.R. 5140) into law. I strongly supported the provision of this bill which temporarily increases the FHA loan limit and GSE conforming loan limit to 125 percent of an area’s median home price, up to a maximum of $729,750. On February 5th, the U.S. Department of Housing and Urban Development published these revised limits for California. Please know that I will carefully monitor the FHA, Freddie Mac, and Fannie Mae as they implement these new loan limits. You may review the newly published FHA loan limits at http://www.HUD.gov. The GSE loan limits can be viewed at http://www.ofheo.gov.
You may be interested to know that conference negotiations to resolve the differences between the House-passed version of the FHA reform bill (H.R. 1852) and the Senate-passed version (S. 2338) are ongoing. These two bills would permanently increase the FHA loan limit, lower down payments, and increase the availability of FHA’s reverse mortgage program, among other reforms. I understand that this issue is of major importance to Californians facing high home prices and the threat of losing their home to foreclosure. Please know that I will continue to do everything I can to help on this critical issue.
Once again, thank you for writing. I hope you will continue to keep me informed on issues of importance to you. If you have any additional questions or concerns, please do not hesitate to contact my Washington, D.C. office at (202) 224-3841. Best regards.
Sincerely yours, Dianne Feinstein
United States Senator
