Capps Statement on Expiration of Mortgage Guarantee

“Strengthening our local housing market is critical to creating jobs and stimulating economic growth. Since 2008, these elevated loan limits have helped make homeownership a reality for thousands of local residents, simultaneously strengthening the housing market and creating jobs. Allowing these limits to expire will be a huge blow to our local economy, forcing over 30,000 homebuyers in California to pay more for their mortgages. This is simply the wrong move at a time when the housing market and economy continue to struggle. I will not stop fighting for this critical extension and other proven solutions to strengthen our local housing market and economy.”

Capps has been working with a bipartisan coalition of Members of Congress to extend the current limits. She is a cosponsor of the Preserving Equal Access to Mortgage Finance Program Act (H.R. 1754), which would make the current limits permanent. She also joined 36 of her colleagues in sending a bipartisan letter to the leadership of the House Appropriations Committee urging them to extend the limits as part of the recently approved Continuing Resolution.

The federal government sets limits on the size of mortgages the Federal Housing Administration (FHA) can insure and Fannie Mae/Freddie Mac can purchase. In 2008, Congress raised the maximum loan for a single family home in high-cost areas like Santa Barbara to $729,750 from the previous $625,000.

At that time, however, Santa Barbara did not qualify for the maximum loan limit, despite having some of the highest home prices in the nation. In March 2008 Capps wrote to then Housing and Urban Development Secretary Alphonso Jackson urging him to designate South Santa Barbara County as a high-cost area, thus making it eligible for the new maximum limit. Capps’ request was granted, raising the limit for the area to $729,750.