Newsroom

July 27, 2015

NAFCU urges no decrease in Fannie, Freddie loan limit

NAFCU on Monday urged that there be no reduction in the conforming loan limit for government-sponsored enterprises Fannie Mae and Freddie Mac in a letter to the Federal Housing Finance Agency, which is reviewing an index that affects that limit.

FHFA uses a house price index to calculate the annual conforming loan limit, currently set at $417,000 for one-unit properties throughout most of the country. The agency is proposing to use an "expanded data" house price index, published quarterly, in future loan-limit.

"While the agency considers implementing this minor economic adjustment to the HPI, NAFCU urges the FHFA to not decrease the conforming loan limit below the current baseline rate of $417,000," Kavitha Subramanian, NAFCU's regulatory affairs counsel, wrote Monday.

"NAFCU's economic research team has concluded that while home sales are widely expected to improve in 2015 as the labor market improves, the exit of many investors from the market and the lack of first-time homebuyers represent two issues of concern for the coming year," Subramanian wrote. "Sudden or drastic changes to the conforming loan limit rate for the Enterprises could hamper this recovery."

Subramanian also urged FHFA to carefully weigh the proposed change for its impact on "high-cost" loan areas where the local median home value is above the baseline loan limit. Credit unions "need safe, affordable and fair access to the secondary mortgage market to in order to effectively meet the lending needs of their 100 million members in communities across the country," she wrote.