FHA Single-Family Reform Headed for House Floor
By a strong bipartisan margin of 45 to 19, the House Financial Services Committee on May 3 approved legislation that would reform and revitalize the Federal Housing Administration’s single-family mortgage insurance programs.
H.R. 1852, the Expanding American Homeownership Act of 2007, would give the FHA greater flexibility to respond to the needs of borrowers, enable more working families to become home owners and provide a viable alternative to the volatile subprime market.
Testifying on FHA reform before the Housing and Community Opportunity Subcommittee last month, Bill Killmer, NAHB’s group vice president for advocacy, championed several recommendations that were ultimately approved last week by the full committee.
Specifically, H.R. 1852 would:
- Increase the current limit for FHA-insured mortgages to enable deserving potential home buyers to buy homes in high-cost areas.
- Provide the HUD secretary additional flexibility to increase the FHA multifamily mortgage loan limits in high-cost areas. With severe shortages of affordable rental housing in most of the high-cost markets, NAHB believes this change would enable developers to provide much-needed new affordable housing to low- and moderate-income families.
- Revise FHA requirements for condominium loans, which are often burdensome and differ significantly from mortgage loans for detached single-family homes.
- Remove the existing 275,000 loan volume cap on FHA's Home Equity Conversion Mortgages, or "reverse mortgages," while increasing the maximum Fannie Mae/Freddie Mac conforming loan limit. This would help more seniors who are at least 62 years old access the equity in their homes without having to make mortgage payments until they move out.
- Grant the FHA authority to establish greater flexibility in setting downpayment requirements for its single-family programs as long as they are operated on an actuarially sound basis.
- Ensure that sufficient funds are appropriated on an ongoing basis for housing counseling.
- Permit the FHA to extend the maximum loan maturity to 40 years to enable borrowers to reduce their monthly mortgage payments.
In addition, the bill includes a provision that would divert some surplus FHA revenue to a new affordable housing fund. This proposal was a source of contention for many Republican lawmakers, who felt it could threaten the solvency of the FHA fund.
The bill is expected to go to the House floor in the coming weeks.
For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144.
Mark Your Calendar for the 2007 NAHB Legislative Conference
The 2007 NAHB Legislative Conference provides a unique opportunity for builders to speak directly with their members of Congress and to take a stand on the issues that affect their businesses and bottom line.
The day-long conference is on Wednesday, June 6 and coincides with the NAHB spring board meeting in Washington, D.C.
Attending the 2007 Legislative Conference offers NAHB members an unparalleled opportunity to:
- Lobby members of Congress to protect your business
- Establish lasting relationships with your elected federal officials
- Share builder concerns in a national forum in Washington, D.C.
- Learn the latest policy developments on the key issues affecting your business
- Demonstrate your industry’s commitment to responsible policies, pragmatic reforms, effective programs and providing the resources necessary to meet our nation’s ongoing housing needs
- Network and share business strategies with your peers
- Learn how to be an effective advocate for your business and your industry
- Make your views known on Capitol Hill
- Do your part to ensure that NAHB’s issues are heard by Washington policymakers
- Galvanize a united front on Capitol Hill
For more information or to register, click here.