February 13, 2008 / 4:20 PM / 12 years ago

Paulson: New loan limit hurts GSE housing mission

WASHINGTON (Reuters) - Treasury Secretary Henry Paulson on Wednesday said raising the ceiling on the size of loans Fannie Mae and Freddie Mac can buy “flies in the face” of the two companies’ mission to provide affordable housing.

“Raising the loan limit flies in the face of the affordable housing mission because you can have no loan limit and they could just have the whole market. That’s not what you want,” Paulson told the House of Representatives Budget Committee.

He said he had agreed to a temporary increase in the loan limits sought by Democratic lawmakers as the price needed to secure a wider package of measures to lift the economy, but stressed any permanent increase needed to be tied to wider regulatory reforms.

Reporting by David Lawder, Editing by Chizu Nomiyama

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