Sen. Hillary Rodham Clinton, D-N.Y., has introduced a bill that would raise Federal Housing Administration loan limits in New York City and other high-cost areas up to the $417,000 conforming loan limit. The Clinton bill is designed to provide working families access to the federal mortgage insurance program in high-cost areas so that they are not forced into risky home purchase loans. “This bill simply reflects the higher-than-average housing costs in states like New York and puts an end to an unfair disparity,” Sen. Clinton said. The current FHA loan limit in high-cost areas is $362,790, or 87% of the conforming loan limit, which is the cutoff point for Fannie Mae and Freddie Mac mortgage purchases. The Bush administration has proposed a comprehensive FHA reform package that includes a similar increase in the FHA loan limit. However, the Clinton bill does not include the administration’s proposals to make the FHA’s insurance premium structure and down payment requirements more flexible.
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