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The U.S. Senate Passes FHA Modernization Bill S. 2338

Real Estate Broker/Owner with REAL ESTATE AMERICA - Ernie Cabrera


I just got word from the National Association of REALTORS Action Center that the Senate has passed the FHA Modernization Bill. They have been working on this for some time now and the next step is to go to a conference committee where they can reconciled the two versions passed, one by the US House of Representatives and the new bill passed by the Senate.

I am hoping we get them to increase the loan limits to the conforming limit now of $417,000.  They are also looking into modifying the downpayment amounts to make it easier for borrowers to qualify for these loans.  The other terms they are working on is a 40 year amortization, possibly allow more condo loans, varianging the mortgage insurance premium, and other helpful programs.

It is not over by no means.  Who knows how it will all look at the end after they work through all of the issues, wants, and dislikes.  FHA has been needing to be Modernized for some time now.  We are on the right track at least.

Read what the bill actually reads:


Here is a link to see how the vote when:



Comments (8)

David Dee
RMX REALTY - Alhambra, CA
Real Estate - San Gabriel Valley (L.A.) & N. Orang


This is great news for CA. I read this in an article earlier today. I had previously heard that the limit would be increased to 417k and hoping that it would pass.

I know that the limit for VA has already been passed to a new limit to match the conforming limit of Fannie and Freddie at 417k. This limit for the FHA was surely to follow as it only makes sense since they are tied to gvt loans. It is sort of like "Love and Marriage. You can't have one without the other." (ie. taken from TV episode Married with Children) So in this case VA is love and FHA is marriage. :)

Do you know anything about the conforming limit increasing from the present 417k? I have heard some say that it might increase to 500k while others said 600k. Increasing this limit would help those who are in the jumbo loans now have the ability to refi.

It's raining in Southern CA! I guess that is better than the snow storm in the east coast.



Dec 18, 2007 05:41 PM
Ernie Cabrera
REAL ESTATE AMERICA - Ernie Cabrera - Elk Grove, CA
Real Estate America


I hope they do pass this and I believe they will.  When a good chunk of lenders who went out of business this year closed the doors to many people trying to refi jumbo loans.  I hope they increase the conforming limits too!  In many parts of the country, $417,000 is plenty high, but in California, it is below the median price range in many regions.

It is raining here in Northern California too!  I love the rain, but it is not good for business.  It is however needed.  I can see Folsom Lake from where I live and it is so empty.  I love going to the snow, but could not imagine being stuck in a snow storm.

Thanks for coming by my friend!  I am still waiting to see you do 10 in 10!

Dec 18, 2007 06:07 PM
Tom Braatz Waukesha County Real Estate 262-377-1459
Coldwell Banker - Oconomowoc, WI
Waukesha County Realtor Real Estate agent. SOLD!

Hi Ernie

I have always liked FHA loans. They also have large ones for commercial dwellings as well.

I hope you and your family have a great Christmas!

Tom Braatz

Dec 19, 2007 03:02 AM
Rosemary Brooks
BMC Real Estate - 209-910-3706 - Stockton, CA
The Mother & Daughter Realty Team

Good news for California.  Keep us updated.  Thanks for the information.

There is a party going on over at my blog.  Its a party for all my associates (present and future).  You are invited.  see How do you show Appreciation to your Associates? .... with wine and cheese and ..... !   See you there!

Dec 20, 2007 11:38 AM
Ernie Cabrera
REAL ESTATE AMERICA - Ernie Cabrera - Elk Grove, CA
Real Estate America

Tom, I have liked FHA loans too.  In the Sacramento Region we used it 80% of the time until the values went above the limit.  It is good they are raising the limit so we can use it again in our area.  Merry Christmas to you and your family too!  Take care!

Rosemary, thanks for coming by and inviting me to the party.  I just came from your party and it was fun!  Thank you!  Merry Christmas to you and your family!

Dec 20, 2007 01:55 PM
M. Roberts


This is great news for the mortgage market in total, with the credit debacle this will prove to be a great response to the situation.  Best of luck to you.

 M Roberts Charlotte, NC  loan officer


Dec 20, 2007 06:43 PM
Ernie Cabrera
REAL ESTATE AMERICA - Ernie Cabrera - Elk Grove, CA
Real Estate America
Mario, it is great news for the real estate market.  FHA has good solid products that have been proven over the years.  Best wishes to you too!  I believe 2008 will be a great year for all of us in the business!
Dec 21, 2007 01:53 AM
Linda Peters
Salem Five Mortgage Company - York, ME

Ernie I have also been following this closely.     I love FHA and this is much overdue..... Hopefully, by the first of the year, we will see some of these changes.

Hope you had a wonderful Christmas Day!   

Dec 26, 2007 02:38 AM