These questions are culled from phone calls, letters, faxes and e-mails sent to Rep. Gallegly's Camarillo, Solvang, and Washington offices. Each week Rep. Gallegly adds another question and answer. Please add your comments.
September 30, 2011
Question: What are conforming loan limits and how do they affect California’s housing market?
Answer: A conforming loan limit is the maximum at which Fannie Mae and Freddie Mac will insure residential mortgages. The current loan limit for potential homebuyers is $729,750.
In high-cost states such as California, it is important that the conforming loan limit remain at $729,750 because a decrease would further weaken the California housing market. Even at $729,750 it remains difficult to get housing loans. Our housing market in California needs some certainty to help get our state moving forward.
On October 1, the conforming loan limit is scheduled to decrease from $729,750 to as low as $417,000. That will negatively impact 669 counties in 42 states and the territories. I am a co-sponsor of H.R. 1754, the Preserving Equal Access to Mortgage Finance Programs Act, which would increase the conforming loan limit levels from $417,000 to $729,750 to help stabilize the housing market.
A decrease in the conforming loan limit during a time of high unemployment and a struggling housing market will only hurt our economic progress. Please know that I will do everything I can to return the conforming loan limit to $729,750.
For more information on my positions on the economy, please see my Key Issue: Economy page.
For previous Questions of the Week chronologically and by topic, please see my Questions of the Week page.
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