Press Releases
REALTOR®: Realtors want Stimulus Package to Include Loan Limit Increase to Help Homeowners and Economy
The National Association of Realtors® has urged President George W. Bush and Congress to help homeowners and the national economy by loosening constraints on Fannie Mae and Freddie Mac as an integral part of a federal stimulus package being considered to revive the economy.
“We believe that any stimulus package must address housing issues and increasing the conforming loan limits for these two government-sponsored enterprises,” said NAR President Dick Gaylord. “The increase in loan limits would not only improve liquidity in the mortgage marketplace, but also boost homebuyers’ confidence levels, resulting in increased sales and economic activity.”
Members of the San Mateo County Association of REALTORS®, the California Association of REALTORS® and NAR have been calling on Congress and the administration to increase the loan limits for Fannie Mae and Freddie Mac from the current ceiling of $417,000 to $625,000. “This change will permit more families to enter the housing market by making more mortgages available with lower interest rates. Increased home sales will lower inventories and immediately start stabilizing the housing market and the economy,” Gaylord said.
In addition, NAR has been actively advocating for quick passage of the Federal Housing Administration Reform bill. A reformed, modernized FHA program would offer a safe and affordable alternative to subprime mortgages, which are widely blamed for the current high rate of foreclosures and credit crunch.
“FHA reform would not only ensure we don’t find ourselves in this very unfortunate situation again, but also it can help many families currently facing foreclosure,” said Gaylord.
NAR estimates lifting the GSE loan limit to $625,000 would lower interest payments for consumers who get new “GSE jumbo” loans, reduce the supply of homes on the market by one to one-and-one-half months, strengthen home prices by two to three percentage points, and increase economic activity by $42 billion. An NAR report shows increasing conforming loan limits could help reduce foreclosures by 140,000 to 210,000 and result in an additional 348,000 home sales.
“This is the quickest way to help the hurting housing market,” said Gaylord. “As the potential for an economic recession increases and the fragile housing market continues to teeter, raising loan limits and reforming FHA would immediately impact the marketplace without the need for any new, complex federal programs or tax dollars.”
Increasing the conforming loan limits “is very important for families who live in areas in our country where the cost of housing is way beyond the norm,” said Sue Walsh, 2008 president of the San Mateo County Association of REALTORS®. But Walsh also believes more is needed to prevent a recession.
“In addition to increasing conforming loan limits, we need to find other ways to stabilize the economy. People need to have job security, know the economy is not in trouble and have the confidence that things aren’t going to be volatile,” said Walsh.
The San Mateo County Association of REALTORS® (SAMCAR) is a professional trade organization representing over 3,800 REALTORS® and Affiliate members engaged in the real estate business on the Peninsula. SAMCAR promotes the highest ethical standards of real estate practice, serves as an advocate for homeownership and homeowners, and represents the interests of property owners in San Mateo County.
The term "REALTOR®" is a registered collective membership mark which identifies a real estate professional who is a member of the National Association of REALTORS® and who subscribes to its strict Code of Ethics.
For further information, please contact Rose Meily at SAMCAR Public Affairs, e-mail , or phone (650) 696-8200.
