Manhattan Condos - New Developments - Conversions - Resales: Congress: Make Higher Loan Limits Permanent?

Congress: Make Higher Loan Limits Permanent?

Back in June, I wrote a featured post: Urgent No More High Balance Conforming Loans for Manhattan. The post was to inform buyers and sellers about the end of High Balance Conforming loans in expensive housing markets such as Manhattan.

Effective October 1, 2011 the temporary emergency legislation Congress enacted in 2008 that raised the limits on conforming loans in expensive housing markets like NYC (Manhattan) expires and is not expected to be extended. In October the amount will be lowered from $729,750 to $625,500 for a High Balance Conforming Loan.

In an article by Alan Zibel in yesterday’s Wall Street Journal Representative Barney Frank (D-MA) is advocating making the current conforming loan limits permanent.

In most places across the country the loan amount is $417,000. In some high cost areas where the median home price exceeds the conforming limit (such as New York, Los Angeles, Boston etc.) this amount has been $729,750 since 2008. Loans that fall between $417,000 and $729,750 but are still eligible for government backing are referred to as high-balance conforming loans.

Real estate is local. Representative Frank is quoted in the Wall Street Journal saying:

“The same level can’t be right for the whole country. It would be an especially bad time economically to lower conforming limits.”

There is proposed legislation from Rep. Brad Sherman (D-CA) and Rep. Gary Miller (R-CA) that would permanently extend the current conforming loan limits. The bill is backed by the National Association of REALTORS and The National Association of Home Builders.

Republican lawmakers want to remove the government from housing finance altogether. The article in today's Journal indicates that a one year extension of the current limits is probably more likely than a permanent extension.

Whether enough members of the Republican - controlled house will support such a move, is an unknown. The chances of an extension passing hinges on how serious the Tea Party Republicans are on reducing the government’s involvement in mortgages.


Politics and Real Estate are both local. Location, Location, Location!



courtesy of:

Mitchell Hall, Associate Broker, The Corcoran Group





©Mitchell Hall 2006-2019

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Comment balloon 4 commentsMitchell J Hall • July 13 2011 07:56AM



Thanks for the informative post,   This is an important one for all concerned.  All the very best, A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) almost 8 years ago

Mitchell, I whole heartily agree. Please keep us updated!

Posted by Ellen Caruso (Daniel Gale Sotheby's International Realty) almost 8 years ago

Hi Tagrid, Thanks, He is going against the Obama administration which is in favor of letting the limits drop. Politics and real estate is always local. Frank represents several high-priced communities in the Boston area.


Posted by Mitchell J Hall, Lic Associate RE Broker - Manhattan & Brooklyn (Compass) almost 8 years ago

This political bickering in DC is rediculous! I'm just wishing us all well and staying as positive as possible. :)

Good luck to everyone! :)

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) almost 8 years ago