Letter from Senattor Reid, Recovery Rebates and Economic Stimulus for the American People Act (H.R. 5140)

Recent turmoil in the global financial markets offers fresh evidence that our nation's economy is struggling.   Faced with surging energy and food costs, rising home foreclosures, falling home values and a slumping job market, Americans' confidence in our economy has been shaken.  In addition, millions of Americans are finding it more and more difficult to make ends meet, particularly those living on fixed incomes.  As the troubling economic news mounted, a growing number of economists came to believe that Congress needed to take urgent action to provide some relief.  In a much needed instance of bipartisan cooperation, Congress and the President were able to come together to enact an economic stimulus plan that provides timely measures to boost the economy.    

As you know, the Recovery Rebates and Economic Stimulus for the American People Act (H.R. 5140) was recently passed by Senate and signed into law by the President. Recognizing that the credit markets were experiencing a liquidity freeze, I made it a priority to include increases in loan limits for mortgages backed by the Federal Housing Administration (FHA) and those purchased by Fannie Mae and Freddie Mac. You might be interested to learn that H.R. 5140 will raise the single-family loan limit to 125 percent of the median value for homes in a given area. This could mean an increase from $362,790 to $729,750. In less expensive markets, H.R. 5140 will raise these limits from 48 percent to 65 percent of median value, which could mean an increase from $200,160 to $271,050. Additionally, FHA will have the discretion of raising loan limits up to an additional $100,000 if market conditions warrant such increases.

Finally, you should also know that the stimulus package would raise loan limits for single family homes purchased by Fannie Mae and Freddie Mac from $417,000 to as high as $729,000. Congress has created these temporary loan limits in FHA, Fannie Mae, and Freddie Mac in order to improve credit availability in the mortgage markets.

As Nevada's senior senator and the Senate Majority Leader, I am committed to doing all I can to strengthen our nation's economy and make Nevada an even better place to live. I very much appreciate your input regarding this matter, and assure you that I understand the important role that this bill will play for the financial security of all Americans. As Congress moves forward with housing legislation, you can be certain that I will keep all your thoughts in mind.

Again, thank you for taking the time to share your thoughts with me. I look forward to hearing from you in the near future.