Update: New Information on the New Loan Limits

Reuter's news agency was announcing late Thursday morning that the U.S. economic stimulus package being hammered out in Congress would include a temporary up tick in the size of loans that Freddie Mac and Fannie Mae would be allowed to purchase.

Republicans on the Hill have agreed to raise the current loan limit of $417,000 for a single family home for one year although there is not yet agreement on how high the limit should go. Proponents, who feel that a higher ceiling would be one way to add liquidity to the mortgage market, frequently mention $625,000 as a new loan limit.

It looks as though Congress has also agreed to a tentative deal to allow tax rebates of $300 to $1200 per family and enact business tax cut to get the economy moving again.

One of the rumored compromises behind the package was an agreement on the part of Democrats to drop increases in food stamps and unemployment benefits in return for gaining rebates for virtually everyone earning a paycheck, perhaps a minimum of $3000 per year, even if they do not make enough to pay income taxes. The Republican proposal would have limited the rebates to taxpayers.

The minimum rebate to those eligible is likely to be $300 with an additional $300 for each child with a family limit of perhaps $1,200. Eligibility would be capped by income of maybe $75,000 for an individual and $150,000 for couples.

Persons familiar with the negotiations estimated that rebate checks would not arrive until probably June.