It turns out the FHA reform portion of the new economic stimulus package only good through the end of 2008. That is the news that came out today as the bill passed easily in a House vote. The Senate gets a whack at the bill next.
Here is an excerpt from a recent story over at BusinessWeek.com:
The House approved two measures Tuesday designed to boost the ailing housing market as part of a broad economic stimulus package.
Under pressure from the Bush administration, lawmakers limited the duration of one of the measures.
The plan, approved 385-35, raises the maximum size of mortgages Fannie Mae and Freddie Mac can buy from $417,000 to as high as $729,750 in expensive parts of the country. The proposed increase would expire at the end of the year.
…
Democrats believed that the Bush administration was open to making that limit permanent for FHA loans. But the Treasury Department insisted over the weekend on making the new FHA limits expire by year-end, Steve Adamske, spokesman for Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said Tuesday.
The administration also swayed House lawmakers to narrow the legislation so that it focused only on hiking the loan limits, rather than enacting a broader overhaul of the agency, which was created during the Great Depression to aid cash-strapped borrowers.
“We’re baffled by this,” Adamske said, noting that the Bush administration has been advocating such legislation for months. “When push came to shove, they didn’t want to pass it as soon as it was possible.”
Jennifer Zuccarelli, a Treasury Department spokeswoman, said in an e-mail message that bills overhauling the FHA and government sponsored mortgage companies Fannie Mae and Freddie Mac “should be completed as soon as possible on a separate track from the stimulus package.”