The federal government could reduce its support for larger mortgages as soon as October of next year, a housing regulatory agency said on Monday.
The Federal Housing Finance Agency, the regulator for the taxpayer-owned Fannie Mae and Freddie Mac, unveiled a plan in which the two mortgage finance giants would gradually reduce the maximum size of home loans they can buy.
Because the government guarantees the loans bought by the two companies, the move would dial back the heavy support Washington provides the mortgage market.
“Setting reduced ‘loan purchase limits’ furthers the goal of contracting the market presence of Fannie Mae and Freddie Mac gradually over time,” the agency said in a statement.
