Republican Gary Miller and Democrat Jerry McNerney introduced a bill today that would make the increase in home loan limits permanent in California.
The pair co-authored bill H.R. 5958, otherwise known as the Homeowner Opportunity Act, which would prevent the maximum loan amount Fannie Mae, Freddie Mac, and the FHA can insure from reverting back to $417,000 and $362,000, respectively, at the end of the year.
Miller in a statement on his website that the current housing crisis is the worst he has seen for more than thirty years, and allowing the loan amount to drop back to its typical level would be “disastrous.”
After the Economic Stimulus Act of 2008 was signed into law earlier this year, the conforming loan limit was temporarily raised to as much as $730,000 in many areas of California and the rest of the nation, although it is set to expire on December 31, 2008.
The so-called conforming jumbo loans have yet to take off, though very recent pledges by Fannie and Freddie to purchase billions worth of them may spark more activity.
The lawmakers noted that the state of California has long been under served by the GSEs and the FHA because the median home price exceeded the conforming loan limit (jumbo mortgages), and added that the proposed legislation is widely supported.
Last week, Governor Schwarzenegger and a slew of California congressional delegates pledged support for a permanent loan limit increase, which they believe would improve the state’s residents access to safe and affordable mortgages.