Joe Wilson's Silicon Valley Real Estate Blog

Less than two months after lowering the maximum loan amount that could be backed by the Federal Housing Administration, lawmakers in Washington reversed course just before the Thanksgiving holiday and once again raised that limit, offering home buyers more financing options in a tight credit market.       

Under the new guidelines, the F.H.A. would be able to back loans up to $729,750 for the next two years in the nation’s most expensive real estate markets, including San Jose and the surrounding metropolitan area.

Before the change, according to rules that went into effect on Oct. 1, the maximum loan the F.H.A., Fannie Mae and Freddie Mac could back was $625,500. Congress decided to leave the lower loan ceilings for the mortgage giants Fannie Mae and Freddie Mac untouched.