UPDATE: Many homes under contract will not be able to close after September 30 if Congress does not act

In an update to a previous post, the Senate voted in favor of an amendment that would reinstate the heightened conforming loan limits for mortgage loans backed by Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA). The amendment, introduced by Sens. Johnny Isakson (R-Georgia) and Bob Menendez (D-New Jersey), passed late Thursday with a 60 to 38 vote. 

The conforming loan limit was previously increased on a temporary basis to $729,750, but the rate expired September 30 and returned to its original rate of $625,500.  The house still needs to approve, if approved the conforming loan limit will rise again to $729,750 and remain there through 2013.