Housing Finance: Implications of Alternative Methods of Adjusting the Conforming Loan Limit
RCED-95-6
Published: Oct 05, 1994. Publicly Released: Oct 05, 1994.
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Highlights
Pursuant to a legislative requirement, GAO reviewed the methodology that the Federal National Mortgage Association (Fannie Mae) and Federal Home Loan Mortgage Corporation (Freddie Mac) uses to adjust the conforming loan limit, focusing on: (1) the effect of using alternative adjustment methods on the loan limit; (2) the implications of Fannie Mae's and Freddie Mac's decision to maintain the 1993 loan limit for 1994; and (3) how data users view the accuracy of the Finance Board's price data.
Recommendations
Matter for Congressional Consideration
| Matter | Status | Comments |
|---|---|---|
| If Congress intends that the conforming loan limit follow the long-term pattern of growth in average home prices, it should amend the legislation to require that adjustments be made on the basis of the time period since the limit had last been changed rather than the 12-month period preceding the adjustment, as currently mandated. | This issue has not been raised in Congress and GAO knows of no future plans. |
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Data integrityEconomic analysisFederal aid for housingGovernment guaranteed loansGovernment sponsored enterprisesLending institutionsMortgage interest ratesMortgage loansMortgage programsHousing