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A story in today's (May 11) New York Times tells how expensive housing markets such as San Diego will lose backing of the federal government in changes expected to take effect September 30.

For the last three years, federal agencies such as the Federal Housing Administration and government sponsored enterprises (GSEs) Fannie Mae and Freddie Mac have backed new mortgages as large as $729,750, the Times explained. Now both Democrats and Republicans agree that the government should not be backing loans that are above the national average. That puts expensive markets such as California and New York at risk.

Here's how San Diego County would be affected: the current FHA and Fannie/Freddie loan limit for mortgage backing is now $697,500. After Sept. 30, if plans go ahead, that will come down to $546,250. That's a drop of $151,250 in loan backing. It is likely to whack housing prices in San Diego County. After making a brisk comeback, they are already sagging again and are down 35.3% from their peak, according to Zillow.

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