Washington could cut Fannie, Freddie home loan limits

The regulator for taxpayer-owned Fannie Mae (FNMA) and Freddie Mac (FMCC) unveiled a plan in which the two mortgage finance giants would have to gradually reduce the maximum size of U.S. home loans they can buy. Because the government guarantees the loans bought by the two firms, the move would dial back the heavy support Washington provides the mortgage market. “Setting reduced loan purchase limits furthers the goal of contracting the market presence of Fannie Mae and Freddie Mac gradually over time,” the Federal Housing Finance Agency said in a statement. The FHFA said it could reduce the loan limit to $600,000 from $625,500 in the nation’s highest-cost areas, which include cities like Los Angeles, New York and Washington.

    

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