Senate votes to extend higher loan limits

AP News
Posted: Oct 20, 2011 11:42 PM
Senate votes to extend higher loan limits

The Senate has voted to extend higher limits on federally backed mortgage loans for two more years.

The 60-38 vote late Thursday meant that through 2013, the government would continue to insure mortgages worth as much as $729,750 in high-priced housing markets. Those limits expired on Oct. 1, dropping that ceiling to $625,000.

The House has not acted on the issue.

Supporters of the higher limits say their expiration makes it harder for purchasers to buy homes, weakening the ailing housing market.

The Obama administration has proposed letting the higher limits lapse, saying this was a way to begin pulling federal mortgage giants Fannie Mae and Freddie Mac out of their dominant roles in the home loan market and creating room for private lenders to expand their business.