FHA Limits Rise Again & New Fee for GSEs

Obama Signs FHA, VA Loan Limits & Slaps on GSE Fee


President Obama'a signature today on H.R. 2112, the bill reinstating extended loan limits for FHA and VA loans through December 31, 2013 excludes government sponsored entities Freddie Mac and Fannie Mae.  As we previously reported, since October 1st the FHA and GSE limit has been $625,500.  The extended limit for designated high cost areas such as Washington D.C. will be $729,750. Be aware that loans written between October 1st and today's extension effective date aren't eligible for the new limits.  

The Senate tried to amend the House bill to add identical extensions for the GSEs, but the joint conference committee would not approve that change. Limits for Freddie and Fannie will be in the range of $417,000 to $625,500 depending on local market conditions. The bill was approved by a House/Senate conference committee vote of 298 to 121 in the House and 70 to 30 in the Senate on Thursday and sent to the president for signature.

Limits on VA loans will return to the levels established under the Veterans Benefits Improvement Act of 2008 which can be higher than FHA limits in some cases.

But wait, there's more! The bill also adds an annual fee for Freddie and Fannie loans. It adds 15 basis points on the outstanding principal balance of the loan and is "independent of any guarantee fees upfront on ongoing, charged to the borrower, and the premium loan fee shall not be affected by changes in guarantee fees."  The bill states the fee is expected to earn $300 million annually, revenue that is to be used "to pay for costs associated with maintaining loan limits established under this section."

More questions on DC real estate or loan limits in the DC Metro area?

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Comment balloon 0 commentsThe Isaacs Team llc • November 18 2011 06:40PM


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