Higher Loan LimitsSome good news for homeowners as the Senate voted yesterday to approve a measure that would restore the high balance conforming loan limit to $729,750 in high cost areas. The amendment was added to a spending bill by Senator Robert Menendez and was approved 60-31 in the Senate.

If the larger spending bill is approved, the bill will be in the hands of the House where they will vote on it. The amendment extends higher loan limits through 2013.

Higher loan limits have been extended several times. After expiring on October 1st, high loan limits for Fannie Mae, Freddie Mac, or FHA loans is $625,500.

Higher Loan Limits History

As part of the economic stimulus package in 2008, temporary higher loan limits were enacted to help homeowners in high-cost areas that were unable to get loans FHA loans and conforming loans they needed and were unable to get regardless of their payment history, credit and income. Homeowners in areas such San Francisco, New York and Los Angeles routinely faced higher priced homes, which meant they were required to bring in substantially larger down payments when purchasing their home. These higher loan limits expired on October 1st.