Even if Congress and the Obama administration allow federal loan limits to fall back to pre-crisis levels in October, as expected, the limits will still be higher than they need to be, professors at The George Washington University School of Business have determined.
“In the wake of significant declines in home prices, we believe the [Federal Housing Administration (FHA)] could reduce its loan limits by approximately 50% and still almost entirely satisfy its target market,” said Robert Van Order, co-author of the FHA assessment report from the university’s Center for Real Estate and Urban Analysis.
