House passes bill that would raise FHA loan limits

Real Estate Watch

August 02, 1998

Higher loan limits on Federal Housing Administration loans may become a reality after the U.S. House of Representatives passed legislation Wednesday.

The legislation raises the FHA's mortgage insurance limits for single-family homes to a higher range, beginning at $109,032 up to $197,620. The current range is $86,317 to $170,362.

The Senate approved the FHA measure July 17 as part of its appropriations legislation. A compromise bill must be approved by Congress before it goes to President Clinton to sign into law.

The Department of Housing and Urban Development wanted to raise FHA-insured loans to a single limit of $227,150, which would put it on a par with Fannie Mae and Freddie Mac loan limits.

Also Wednesday, Clinton signed into law The Homeowners Protection Act of 1998, which cancels private mortgage insurance for homeowners with 22 percent equity.

Private mortgage insurance is usually required by lenders if a purchaser pays a down payment of less than 20 percent on a home. It protects the lender if the homeowner defaults.

Pub Date: 8/02/98

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