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Rep. Frank says hope exists for maintaining current loan limits

Rep. Barney Frank still calling to keep high loan limits.

Rep. Barney Frank still calling to keep high loan limits.

Legislators on Capitol Hill are holding out hope that the Obama administration will keep the higher loan limits for Fannie Mae and Freddie Mac, which would provide more assistance to consumers looking to purchase a new home.

One lawmaker, U.S. Representative Barney Frank of Massachusetts, says he thinks President Barack Obama, who has opposed to maintaining the loan limits, may yet change his mind, The Wall Street Journal reports.

The current loan limits affect financing handed out by Freddie Mac, Fannie Mae and the Federal Housing Administration and extend through the end of September. Without legislative action, the loan limit will fall from $729,750 to $625,500 in a number of areas. This means on October 1, mortgages worth more than $625,500 will not qualify for government backing.

With the housing market in disarray, a number of legislators think that lowering the loan limit may further stymie home sales. If prospective homebuyers are unable to secure government-backed mortgages, they may bypass moving to a new neighborhood for a less expensive alternative.