Sec. 504. Conforming loan limits

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Beginning on the date of enactment of this Act, the limitations governing the maximum original principal obligation of conventional mortgages that may be purchased by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, referred to in section 302(b)(2) of the Federal National Mortgage Association Charter Act ( 12 U.S.C. 1717(b)(2) ) and section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act ( 12 U.S.C. 1454(a)(2) ), respectively, shall not exceed $417,000 for a mortgage secured by a single-family residence, $533,850 for a mortgage secured by a 2-family residence, $645,300 for a mortgage secured by a 3-family residence, and $801,950 for a mortgage secured by a 4-family residence, except that such maximum limitations shall be adjusted effective January 1 of each year beginning after the date of enactment of this Act, subject to the limitations in this paragraph.

Each adjustment shall be made by adding to each such amount (as it may have been previously adjusted) a percentage thereof equal to the percentage increase, during the most recent 12-month or 4-quarter period ending before the time of determining such annual adjustment, in the housing price index maintained pursuant to section 1322 of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 ( 12 U.S.C. 4542 ). If the change in such house price index during the most recent 12-month or 4-quarter period ending before the time of determining such annual adjustment is a decrease, then no adjustment shall be made for the next year, and the next adjustment shall take into account prior declines in the house price index, so that any adjustment shall reflect the net change in the house price index since the last adjustment.

Declines in the house price index shall be accumulated and then reduce increases until subsequent increases exceed prior declines. The limitations set forth under subsection

(a)shall be increased by not to exceed 50 per centum with respect to properties located in Alaska, Guam, Hawaii, and the Virgin Islands. The limitations set forth under subsection

(a)shall also be increased, with respect to properties of a particular size located in any area for which 115 percent of the median house price for such size residence exceeds the limitation under subsection

(a)for such size residence— for the first year following the date of enactment of this Act, to the lesser of 150 percent of such limitation for such size residence or the amount that is equal to 115 percent of the median house price in such area for such size residence; for the second year following the date of enactment of this Act, to the lesser of 145 percent of such limitation for such size residence or the amount that is equal to 115 percent of the median house price in such area for such size residence; for the third year following the date of enactment of this Act, to the lesser of 135 percent of such limitation for such size residence or the amount that is equal to 115 percent of the median house price in such area for such size residence; for the fourth year following the date of enactment of this Act, to the lesser of 130 percent of such limitation for such size residence or the amount that is equal to 115 percent of the median house price in such area for such size residence; and for the fifth year following the date of enactment of this Act, and each year thereafter, to the lesser of 125 percent of such limitation for such size residence or the amount that is equal to 115 percent of the median house price in such area for such size residence.

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Sec. 504

Conforming loan limits

U.S.C.§ 1717

U.S.C.§ 1454

U.S.C.§ 4542

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