Size of Loans Elgible for Government Backing Set to Decline in October

The size of mortgages elgible for backing from Fannie Mae, Freddie Mac and the Federal Housing Administration is set to decline in hundreds of counties on October 1st.  Congress raised loan limits as an emergency measure in 2008 for certain high cost housing markets but policymakers are now anxious to shrink the governments outsized footprint.  Although the new limits won’t take effect until October 1st, some lenders are already warning borrowers that they will stop accepting applications for loans that exceed the new limits much sooner in order to ensure the loans are funded before the cutoff date.

Wall Street Journal  July 6, 2011