Introduced on May 5, 2011, HR 1754 would permanently increase conforming loan limits in high cost areas like San Francisco, Boston and New York to 125% of average. This drastically helps people like Brian and I to afford housing in the $600k to $900 range which is a typical median range for 2 and some 3 bedroom houses in San Francisco!

Preserving Equal Access to Mortgage Finance Programs Act – Amends the Federal Home Loan Mortgage Corporation Act and the Federal National Mortgage Association Charter Act to increase limitations on the maximum original principal obligation of mortgages that may purchased by the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation Association (Freddie Mac). Increases such limitations in areas where 125% (currently, 115%) of the median price of residences of a particular size exceed existing mortgage purchase limitations for such residence size. Gives the Director of the Federal Housing Finance Agency (FHFA) discretion to prevent or limit a decrease in the limitation on the maximum original principal obligation of a mortgage that may be purchased by the corporation for an area. Amends the National Housing Act to raise limitations on the maximum principal obligation of mortgages that may be insured by the Secretary of Housing and Urban Development (HUD). Gives the Secretary discretion to prevent or limit a decrease in the maximum dollar amount limitation for any area from taking place for any such area.

Please write your representative TODAY and encourage him/her to support this bill!

Time is running short for Congress to prevent FHA and conforming loan limits from reverting back to 2008 levels. The current limits expire Sept. 30 and will drop from 125 percent of the area media home price (and a top limit of $729,750) to 115 percent of area home price and a top limit of $625,500. If Congress fails to extend the limits and they drop, people who are “caught in the middle” and living in high priced real estate areas like San Francisco will be hurt.

Regardless of what Congress decides to do, it’s clear there’s a lot of information on the issue in the media that’s simply not helpful. It’s not uncommon for current loan limits to be described as helping higher-cost housing or sometimes people think that it’s helping folks get loans they otherwise wouldn’t qualify for, but that’s simply not true. And a drop in the limits will be hard on middle-class buyers and sellers, because maximum conforming loan limits will drop in markets throughout the country. This will impact over 670 markets in more than 40 states–not just San Francisco, New York and Boston.

How will dropping loan limits now help stabilize housing markets? It won’t. And with real estate still flat or shrinking, everyone could use a boost right now. This economy is still in the crapper and the last thing we want to do is to block folks like Brian and I from being able to make a purchase, help the economy and at zero risk to banks or the government. Banks are afraid to loan money, folks. They aren’t giving away loans like they were back in 2003-2007. This is about helping the middle-end folks like Brian and I.

Letter sent to our representatives:

Hi there,

My husband and I are hard working, middle income earning professionals living in San Francisco. We’d like to own our own home and we certainly have the income to do it, but we don’t have the downpayment to cover the 2008 conforming loan limits that are set to roll back this September 30th.

Unfortunately we decided to jump into the market rather late and while we were learning about home buying and home loans, we discovered that the higher conforming loan limits are set to expire.

Congress needs to extend these limits to help people like Brian and I “realize the American dream” of owning our own home. We’re not looking for a handout, we intend to pull our fair share. If we have to save up for the full 20% to purchase the median priced home in the decent areas of San Francisco, that would be nearly $200k in cash. We can do that, but it will only delay our dream for several years.

Please help by submitting legislation to Congress to extend these conforming loan limits, stimulate the economy, which is already losing steam again amidst the European economic uncertainty. Your actions will have a huge impact in areas like San Francisco and for people like us. Please help us.

Thanks,

Erik & Brian Jones.