“The region I represent was particularly hard hit by the foreclosure crisis,” said Rep. McNerney. “While the housing market has improved, we owe it to potential buyers to provide access to affordable financing so that hardworking families can purchase homes and we can continue to rebuild our local economy.”
The bill will stabilize the loan limit calculations by requiring HUD to use a Median Home Price (MHP) consistent with the MHP used in 2013 when calculating the loan limit for a specific area. The Act also lets HUD react to local market conditions by giving it the authority to alter the loan limits for different communities within the same county.
In late 2013, HUD made the decision to reduce the MHP used to calculate FHA loan limits for numerous counties throughout the nation, resulting in over 650 counties facing lower FHA loan limits. Homebuyers in these counties who had planned to use FHA financing to purchase a home would have to find alternate sources of funding. The Stabilizing FHA Loan Limit Calculations Act of 2014 would adjust the MHP used by the FHA, making loans more available and giving more families a chance to invest in their futures by becoming homeowners.
The California Association of Realtors supports the bill, with president Kevin Brown saying “We commend Congressman Jerry McNerney for co-authoring this bill to reverse and prevent future declines in the FHA loan limits, which will provide stability and certainty to the housing market and give tens of thousands of California homebuyers a chance at homeownership. Without this important piece of legislation homebuyers across the state would be unable to have access to affordable mortgage capital through the FHA mortgage program and would reduce homeownership opportunities.”