FHFA Plans To Increase Credit; Leaves Loan Limits Unchanged
On May 13, 2014, Federal Housing Finance Agency (FHFA) Director Mel Watt made his first public speech addressing FHFA’s strategic plan for Fannie Mae and Freddie Mac (the government sponsored enterprises or GSEs). In the speech, Director Watt announced that the GSEs would take actions that improve liquidity in the present single-family housing finance market, including stepping back from a proposed reduction in conforming loan limits which are currently set at $417,000 and up to $625,500 in high-cost areas of the country. In December 2013, former FHFA Acting Director Ed DeMarco had proposed reducing the limits to $400,000 and $600,000 respectively, an action that NAR opposed. Director Watt also indicated that FHFA would be publishing a request for input on the guarantee fees (g-fees) and loan level pricing adjustment fees (LLPAs) that are often passed onto borrowers. NAR will be submitting comments once the request is published.