Debate over loan limits won’t affect Houston

Part of the mortgage debate in Washington won't have any effect in Houston.As lawmakers in Washington, D.C. debate the future of Fannie Mae and Freddie Mac, some of the discussion has focused on the reduction of loan limits for government-backed loans. However, those changes won't affect the Houston real estate market.

In 2008, officials raised the maximum loan value for mortgages that could be guaranteed by Fannie Mae and Freddie Mac from the standard $417,000 to as high as $729,750 in some high-priced areas, like New York City, in essence making it easier to buy homes in those cities.

A number of sources have said that lawmakers will likely let the higher limits expire as planned in September, instead of extending them like they did in 2010, when the economy was less stable. That will make mortgages for higher-end homes more expensive in some parts of the country.

But for Houston homes, those higher loan limits didn't apply, because officials said that Houston homes were affordable enough that they didn't need the extra government support. In fact, no cities in Texas qualified for an elevated limit.

Other studies have also shown the affordability of Houston homes. A recent study by Demographia found that local properties were the 15th-most affordable of any U.S. city with more than 1 million people.

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