Short title

This Act may be cited as the

Homeowner Opportunity Act of 2008

Permanent conforming loan limit increase for high-cost areas for Fannie Mae and Freddie Mac

(a)

Fannie Mae

Section 302(b)(2) of the Federal National Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)) is amended— (1)in the second sentence, by redesignating clause (A) through (C) as clauses (i) through (iii), respectively; (2)in the third sentence, by striking clause (A) and inserting clause (i); (3)by inserting (A) after (2); and (4)by adding at the end the following new subparagraph:

(B)(i)Notwithstanding subparagraph (A), for mortgages originated on or after January 1, 2009, the limitation on the maximum original principal obligation of a mortgage that may be purchased by the corporation shall be the higher of— (I)the limitation determined under subparagraph (A) for a residence of the applicable size; or (II)125 percent of the area median price for a residence of the applicable size, but in no case to exceed 175 percent of the limitation determined under subparagraph (A) for a residence of the applicable size. (ii)The areas and area median prices used for purposes of the determination under this subparagraph shall be the areas and area median prices used by the Secretary of Housing and Urban Development in determining the applicable limits under section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)). A mortgage that is eligible for purchase by the corporation at the time the mortgage is originated under this subparagraph shall be eligible for such purchase for the duration of the term of the mortgage.

(b)

Freddie Mac

Section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) is amended— (1)in the first sentence, by redesignating clause (A) through (C) as clauses (i) through (iii), respectively; (2)in the second sentence, by striking clause (A) and inserting clause (i); (3)by inserting (A) after (2); and (4)by adding at the end the following new subparagraph:

(B)(i)Notwithstanding subparagraph (A), for mortgages originated on or after January 1, 2009, the limitation on the maximum original principal obligation of a mortgage that may be purchased by the Corporation shall be the higher of— (I)the limitation determined under subparagraph (A) for a residence of the applicable size; or (II)125 percent of the area median price for a residence of the applicable size, but in no case to exceed 175 percent of the limitation determined under subparagraph (A) for a residence of the applicable size. (ii)The areas and area median prices used for purposes of the determination under this subparagraph shall be the areas and area median prices used by the Secretary of Housing and Urban Development in determining the applicable limits under section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)). A mortgage that is eligible for purchase by the Corporation at the time the mortgage is originated under this subparagraph shall be eligible for such purchase for the duration of the term of the mortgage.

(c)

Sense of congress

It is the sense of the Congress that the securitization of mortgages by the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation plays an important role in providing liquidity to the United States housing markets. Therefore, the Congress encourages the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation to securitize mortgages acquired under the increased conforming loan limits established by the amendments made by this section, to the extent that such securitizations can be effected in a timely and efficient manner that does not impose additional costs for mortgages originated, purchased, or securitized under the existing limits or interfere with the goal of adding liquidity to the market.

Permanent loan limit increase for high-cost areas for FHA

(a)

In general

Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) is amended by striking subparagraph (A) and inserting the following new subparagraph:

(A)that does not exceed the lesser of— (i)in the case of a 1-family residence, 125 percent of the median 1-family house price in the area, as determined by the Secretary; and in the case of a 2-, 3-, or 4-family residence, the percentage of such median price that bears the same ratio to such median price as the dollar amount limitation determined under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) for a 2-, 3-, or 4-family residence, respectively, bears to the dollar amount limitation determined under such section for a 1-family residence; or (ii)175 percent of the dollar amount limitation determined under such section 305(a)(2)(A) for a residence of the applicable size (without regard to any authority to increase such limitation with respect to properties located in Alaska, Guam, Hawaii, or the Virgin Islands and without regard to the high-cost area limitation under such section 305(a)(2)(B)); except that the dollar amount limitation in effect under this subsection for any size residence for any area shall not be less than the greater of— (I)the dollar amount limitation in effect under this paragraph for the area on October 21, 1998; or (II)65 percent of the dollar amount limitation determined under such section 305(a)(2)(A) for a residence of the applicable size; and

(b)

Publication of area median prices and loan limits

Section 203(b) of the National Housing Act (12 U.S.C. 1709(b)(2)(A)) is amended by adding after and below paragraph (9) the following:

The Secretary of Housing and Urban Development shall publish the median house prices and mortgage principal obligation limits for all areas each year, not less than 45 days before the time of determining the annual adjustments to the dollar amount limitations under section 305(a)(2)(A) of the Federal Home Loan Mortgage Corporation Act (12 U.S.C. 1454(a)(2)(A))