ARLINGTON, Va.–The Federal Housing Finance Agency is being urged by NAFCU to not decrease the conforming loan limit below the current baseline rate of $417,000 as it considers other changes to how it calculates the Housing Price Index.
The "Housing and Economic Recovery Act of 2008" (HERA) requires the FHFA to “establish and maintain” a house price index for adjusting the conforming loan limits of the Enterprises. As a result, the FHFA is currently requesting input on using a slightly altered index to calculate the annual conforming loan limit. In 2015, the conforming loan limit is set at $417,000 for one-unit properties throughout most of the nation. The agency has said that intends to use the “expanded-data” house price index (HPI)—an index the agency publishes quarterly—to adjust the conforming loan limits for the Enterprises in the future.
"While the agency considers implementing this minor economic adjustment to the HPI, NAFCU urges the FHFA to not decrease the conforming loan limit below the current baseline rate of $417,000," said NAFCU regulatory affairs counsel in the comment letter. "NAFCU believes the current 2015 limits should be kept in effect in order to avoid a disruption to the national housing market that is still recovering."
Subramanian also urged the FHFA to "carefully consider the impact that the use of the “expanded-data” HPI may have on “high-cost” loan areas where the local median home value is above the baseline loan limit."
"Our nation’s credit unions need safe, affordable and fair access to the secondary mortgage market in order to effectively meet the lending needs of their 100 million members in communities across the country," Subramanian wrote. "Although the housing market continues to heal as a result of current job growth, wage gains and low interest rates, NAFCU and our members caution the FHFA to remain cognizant that the U.S. housing market is still vulnerable to any drastic market changes."