raise the FHA’s loan limit from its current $417,000 to as much as $729,750
I researched this topic in the web a bit, but still don’t understand some things.
As far as I know, the FHA’s limit until very recently was $368,000, not $417K.
If the bill really talks about FHA (as opposed to GSEs Freddy and Fannie), then it’s not that bad. FHA is not a mortgage company, it’s an insurance company. If you are eligible, you can pay the insurance premium, that would cover your mortgage in case of a default. FHA claims it does not rely on taxpayers’ money for its business, and covers all expenses with the income it generates from insurance payments. Am I correct?
If the bill is about raising GSEs’ conforming threshold, will it allocate any additional funding to Freddy and Fannie? Neither this nor any other article I was able to find mentioned that. As far as I know, they have combined budget of $1.4 trillion. If that number is not increased, doesn’t raising the limit mean that GSEs will have an option to finance one expensive house instead of 3 regular ones?
I’d appreciate if somebody could shed some light on this.
