On March 20, 2014, NAR President Steve Brown submitted comments on the Federal Housing Finance Agencies (FHFA) request for information on lowering the loan purchase limits for Fannie Mae and Freddie Mac (the Enterprises). Former FHFA Acting Director DeMarco published a request for information on reducing the loan limit floor from $417,000 to $400,000 and high cost cap from $625,500 to $600,000. In the Letter, NAR states:
- In the Housing and Economic Recovery Act of 2008 (HERA), Congress made ensuring the Enterprises serve as a reliable source of liquidity and funding for housing finance and community investment a principal duty of the Director and therefore a policy to reduce the loan limits is contrary to this principal.
- Private capital has still not returned in any significant way. Even those who may be able to qualify for private financing would not have access to a 30 year mortgage since banks are hesitant to offer the loans to any but the most affluent borrowers.
- While Congress granted FHFA, as conservator, broad authority as part of HERA, we believe that it was to be exercised within the law granting that authority which made the policy not to reduce loan limits permanent in section 1124.
- If pursuing a reduction in loan limits is an important policy objective, FHFA should not override congressional policy that loan limits not be reduced and alternatively, request that Congress address the issue again.
NAR will continue to work with FHFA in the coming months to ensure that borrowers in all markets don't experience a reduction in access to mortgage credit.