In an attempt to stave off a financial crisis the Bush administration raised the FHA loan limits in 2008. While the higher loan limits helped, they obviously did not stave off a massive housing crisis. The problem is that the higher loan limits expired on Dec. 31 2008. One of the things the new Obama economic stimulus bill will do is reinstate the 2008 higher loan limits. Here is a quote from an article over at MSNBC.com:
The bill also reinstates the 2008 higher loan limits for FHA, Fannie Mae and Freddie Mac. “These higher loan limits are important to make mortgages affordable regardless of where you live. This will also help reduce inventory and improve liquidity in the overall mortgage market,” McMillan said.
This is good news for many people all over the country. FHA will be able to help significantly more folks with these higher limits.