The National Association of REALTORS® (NAR) is a strong supporter of the single- and multi-family programs administered by the Federal Housing Administration (FHA). The FHA single-family mortgage program has played an important and vital role in the mortgage marketplace. The FHA program has a public purpose obligation to provide mortgage insurance to American families who choose FHA to meet their homeownership needs. Increasing the capacity of FHA will insure it is a viable product for home buyers and expands the pool of available safe and affordable loan products.

FHA Loan Limits

On September 30, 2010, Congress passed legislation extending the loan limits for Freddie Mac and Fannie Mae (the GSEs) and FHA. Under the bill, which has been signed by the President, the current loan limits will remain in place through September 30, 2011. These loan limits, set at 125% of local area median home price and capped at $729,750, would have expired on December 31, 2010 in which case loan limits would have been reduced in many markets.

What is the fundamental issue?

The mortgage loan limits for the GSEs (Freddie Mac and Fannie Mae) and for FHA are critical to providing liquidity in today’s housing market. Especially as the private market has yet to return, these programs are vital to our housing recovery. The current GSE limits range from $417,000 to $729,750, depending on local area median home price. The FHA limits range from $271,050 to $729, 750, also based on 125% of local area median home price. Both of these limits are set to expire on September 30, 2011 and will reset to 115% of local area median up to $625,500.

Who will be impacted by the proposed changes in loan limits?

Changes to loan limits vary by county and state. The proposed changes do not impact counties in the Greater Houston area. Therefore, loans on residential property in Harris County, Fort Bend County, Montgomery County, Brazoria County, Galveston County, Liberty County, Waller County, Chambers County, Austin County and San Jacinto County should not see decreases to their respective FHA and GSE loan limits.

However, the following counties in Texas will see reductions in their FHA and GSE loan limits if Congress does not act:

  • Atascosa
  • Bandera
  • Bastrop
  • Bexar
  • Caldwell
  • Comal
  • Guadalupe
  • Hays
  • Jeff Davis
  • Kendall
  • Medina
  • Travis
  • Williamson
  • Williams

The following chart lists all those counties across the United States that will see a change in limits. If your county/state is NOT listed here, your limit will not change:

I’m a real estate professional. What does this mean to my business?

With the tight constraints on mortgage availability, lowering the FHA/Fannie/Freddie loan limits would only further restrict liquidity. Even with the higher limits, borrowers are finding it more and more difficult to find affordable mortgage options. Making the limits permanent at levels appropriate in all parts of the country will provide homeowners and homebuyers with safe, affordable financing and help stabilize local housing markets.

NAR Policy:

NAR supports making the current higher loan limits and formula permanent.

Legislative/Regulatory Status/Outlook:

The current limits are set to expire on September 30, 2011. With this deadline, the agencies will plan to publish the new limits early in the summer. Unless the private market begins to make a significant return to the mortgage market, NAR the limits will need to be extended. Further restricting liquidity by lowering the limits would have a dramatically negative impact on our housing recovery.

What can I do?

Visit NAR’s Call for Action page at and make your voice heard opposing these decreases to the FHA and GSE loan limits