Begs the question... Why have loan limits at all? :) We may as well wrap in VA loans into the discussion. Even though in regards to timing - now would be THE time for the government to consider raising federally backed mortgage limits since they are in the process of buying 40 billion a month from FNMA and Freddie Mac - so it's safe to say US Government is now officially in Mortgage Business, and making more money available for lending purposes should theoretically help the housing market. So the question we really should be asking is - What are the reasons that they CAN't raise the limits, and not if they should. If FHA guidelines are based on average household income and average sale prices, then my guess is that they will first have to come with grips that the prices ARE rising and that people ARE making more money these days - Which may very well not be the case in most places where FHA lending is popular.