NAHB Supports No Decrease in Conforming Loan Limit

Washington, DC, March 27, 2008--The National Association of Home Builders praised the Office of Federal Housing Enterprise Oversight (OFHEO) for its decision not to decrease conforming loan limits from the current level of $417,000 in 2009 and subsequent years.

“OFHEO’s decision to reverse a proposal to establish new guidelines that could have resulted in lower conforming loan limits in future years is welcome news for the housing sector,” said Jerry Howard, executive vice president and CEO of NAHB. “With housing in the midst of a serious downturn and the mortgage markets in crisis, this move is a step in the right direction to ensure that there is an adequate availability of funds for the refinancing of loans and for new loans.”

OFHEO said, however, that the conforming loan limit will not increase until cumulative increases in house prices exceed cumulative decreases since the $417,000 limit was first reached. This is consistent with current practice for the annual loan limit adjustment, which NAHB supports.

The final guidelines to prevent future declines in the conforming loan limit announced today by OFHEO are in line with recommendations put forth by NAHB and other industry groups.

The announcement has no impact on the temporary increase in the conforming loan limit for high-cost areas recently established in the economic stimulus act and set to expire at the end of this year.