If an extension isn’t granted by Congress before October 1, Federal Housing Administration loan limits may be allowed to revert to 115 percent of an area’s median home price, down from a current 125 percent.
While that might not seem like much, some estimates show that more than 17 million homes nationwide will become ineligible for more affordable federal funding if current loan limits are allowed to expire.
Reverting to lower loan limits will result in an average reduction of more than $68,000. That means fewer families would have access to affordable mortgage loans, forcing more buyers into jumbo mortgages. Home owners could also have a tougher time selling their homes because there would be fewer buyers who qualify to purchase them.
To find out how potential home buyers in your community might be affected, visit Government Affairs. Talk to a REALTOR® in your area about what effect reducing the loan limits might have on local buyers and sellers.