President Barack Obama has signed HR 2112, the Consolidated and Further Continuing Appropriations Act of 2012 into law renewing the expired higher loan limits for Federal Housing Administration (FHA) and U.S. Department of Veterans Affairs (VA) loans for an additional two years, through Dec. 31, 2013.
The higher loan limits expired on Oct. 1, 2011, when the size of a mortgage that the FHA could buy or guarantee was reduced to $625,500, down from $729,750. In addition, the formula for establishing limits for high-cost areas also fell from 125 percent to 115 percent of an area’s median home price.
Prior to President Obama’s signature, HR 2112 was approved by a 298-121 vote in the U.S. House of Representatives, and was faced with opposition by 101 House Republicans, many of whom opposed the measure due to the loan limit increase.
“Restoring the higher FHA loan limits will help to stabilize home values, provide constancy while private investors re-enter the market, and enable millions of creditworthy consumers to get home loans with the best mortgage rates and lowest fees and downpayment requirements,” said National Association of Home Builders (NAHB) Chairman Bob Nielsen.
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