Making the current FHA loan limits permanent would ensure liquidity in the housing market and make mortgages more affordable for qualified buyers at a time when the market is showing signs of a fragile recovery, the National Association of Realtors® testified to the House Subcommittee on Housing and Community Opportunity today.
Current FHA loan limits are as high as $729,750 in high cost areas, and are set to expire at the end of the year and revert to lower amounts, greatly hindering the housing recovery process. FHA is more important than ever to homebuyers in the present market. In the wake of the collapsing private mortgage market, FHA has played a critical role in removing inventory from the market and stabilizing home prices, Present FHA housing market share is approaching 25 percent, significantly up from 3 percent two years ago.
NAR said that FHA has performed remarkably well through the housing crisis, compared to Fannie and Freddie, because FHA has never strayed from the sound underwriting and appropriate appraisals that have traditionally backed up their loans.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries
