The measure boosts the limit on loans that can be insured by the FHA to the same $729,750 in high-cost areas and raises the floor on government-insured loans from 95% of an area's median to 125%.
Under the new floor, the FHA limit would be $271,050, regardless of an area's median home price. But that's still substantially below the current Fannie-Freddie lid of $417,000.
The law requires the FHA to calculate the ceilings and put them in place within 30 days after the President signs the stimulus legislation. It also requires Fannie Mae and Freddie Mac to operate under those calculations
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