The Federal Reserve Thursday morning released its 2010 Home Mortgage Disclosure Act (HMDA) database, concluding that a drop in the maximum GSE loan limit to $625,500 (from $729,750) will have only a "small" impact on mortgage originations going forward.
The loan limit change, which is being fought by several industry trade groups, is set for Oct. 1.
Researchers at the Fed estimate that in 2010 just 1.3% of Fannie Mae/Freddie Mac mortgages – including both refinancings and purchase money deals – fall into the GSE ‘Jumbo' category of being between $625,500 and $729,750.
However, an additional 2.1% of 2010 home-purchase loans and 2.4% of refis would "potentially" be affected by a decline in Federal Housing Administration (FHA) loan limits.
The GSE loan limit floor is $417,000 in areas where the median house price is less than 65%, while the FHA floor is $217,050.
The Fed's analysis of the HMDA filings shows that the number of purchase mortgage originations fell to 2.5 million units in 2010, a 8.9% decline from 2009.
Government-backed loans – FHA, Department of Veterans Affairs and Rural Housing Services loans, which Fed researchers call "nonconventional" loans – comprised 46% of purchase mortgages in 2010, compared to 48% the prior year.
"The share of nonconventional loans in the home-purchase market peaked" in April 2010, the Federal Reserve said, when FHA raised its upfront fee by 50 basis points.