In part because Fannie Mae and Freddie Mac got into so much trouble during the housing crisis, Congress placed them into conservatorship to bring some urgently needed reforms. Congress also set policy in 2008 that federal regulators may not reduce loan limits without going back to Congress first.
Over at FHFA, this means that the agency is trying to reduce loan limits and raise fees all by itself, just because it says it can as a conservator. Not so fast - NAR reminded FHFA in its letter that it has no legal authority to do so. And even if it did, well that's just bad policy. After all, we do want to keep mortgages available for those buyers who qualify, don't we?
How does this affect your buyers? The short answer: Loan limits are the maximum value of a loan that Fannie and Freddie will purchase from a lender. Loans valued above these limits have little or no access to the secondary market, which makes them more difficult to fund. As the limits get lower, an increasing number of qualified homebuyers may be denied access to a mortgage to buy their home. This is not a good thing.
The issue of loan limits and the government's role in secondary mortgage market is much more complicated than we can explain here, so for more detail check out NAR's webpages on this topic.
