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Congress Raises FHA Loan Limit

Lawmakers voted late Thursday to increase the ceiling for loans insured by the ""Federal Housing Administration"":http://www.fha.gov (FHA). The measure was signed into law by President Obama Friday morning.

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Included in a ""minibus"" spending bill passed by both the House and Senate was an amendment to restore the FHA loan limit to $729,750 in high cost areas.

The maximum loan limit was lowered from that amount to $625,500 on October 1st for government housing agencies, including FHA, ""Fannie Mae"":http://www.fanniemae.com, and ""Freddie Mac"":http://www.freddiemac.com.

The provision reinstates the FHA loan limits through 2013 at 125 percent of local area median home prices, up to a maximum of $729,750 in the highest cost markets.

The loan limits for Fannie Mae- and Freddie Mac-backed mortgages, however, will remain at 115 percent of local area median home prices, up to $625,500.

The bill also provides for a short-term extension of the National Flood Insurance Program through December 16, 2011.

About Author: Carrie Bay

Carrie Bay is a freelance writer for DS News and its sister publication MReport. She served as online editor for DSNews.com from 2008 through 2011. Prior to joining DS News and the Five Star organization, she managed public relations, marketing, and media relations initiatives for several B2B companies in the financial services, technology, and telecommunications industries. She also wrote for retail and nonprofit organizations upon graduating from Texas A&M University with degrees in journalism and English.
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