Posted on 12/08/2013 11:51:10 AM PST by whitedog57
According to Nick Timiraos at the Wall Street Journal, Housing Agency (FHA) Will Reduce Mortgage-Loan Limits next month.
The maximum for single-family homes in certain high-cost housing markets including Los Angeles, San Francisco and New York will fall to $625,500, from the current level of $729,750.
This is an attempt to bring the FHA back in line with their original mission of supporting first time homebuyers, not the Brad Pitts of the world. Why does the Federal government insure mortgages in expensive cities that are far more costly than middle America? Ask your Congressman.
Example. Honolulu leads the nation in FHA loan limits at $721,050. And the vacation island of Kauai is second with a loan limit of $713,000.
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I wonder if the late Poncie Ponce had a million dollar home in Honolulu?
FHFA was considering lowering the conforming loan limits for Fannie Mae and Freddie Mac in 2014, but screams from affordable housing and industry lobbyists led to a delay in lowering the limits. The National Association of Realtors ({NAR) cautioned FHFA that such an experiment would jeopardize home ownership for many creditworthy buyers, especially first-time home buyers who are often less likely to meet the 20 percent minimum down payment requirement.
Ah, the old affordable housing meme again. Hey NAR, it isnt the loan limit that is the problem. It is the decline in real median household income since 2000 (blue line). Why RAISE keep the conforming loan limit near all-time highs when the average American is less wealthy?
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It has nothing to do affordable housing or low to middle income housing. It has to do with taxpayers subsidizing home purchases in expensive coastal cities and vacation spots. How do people in Katy, Texas feel about subsiding mortgage loans in La Jolla, California?
Or how does Napolean Dynamite feel about subsidizing ski vacation homes on other parts of Idaho.
Napoleon-Dynamite-napoleon-dynamite-117744_720_540
There is no reason to have FHA or FHFA loan limits this high supporting wealthier American households at the expense of the less wealthy. I doubt that Brad Pitt has an FHA insured mortgage, but millions of borrowers in California, New York, Washington DC and Hawaii are being subsidized by middle America.
Try to take away Californias mortgage subsidy for million dollar homes and you will have a fight on your hands!
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fhalimitsnew bpittfightclub household-income-monthly-median-since-2000dec?
The housing bubble is the direct result of crony capitalism. The NAR, MBA, RE investors, etc. lobby Congress to subsidize their business and this is what we get. End the subsidies and go after restrictive zoning laws via the Commerce Clause. You’ll see affordable house prices with a return to respect for private property.
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