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Aid for Subprime Borrowers Included in HUD 2008 Funding
To help subprime mortgage borrowers, the Senate last week voted to include up to $200 million for Department of Housing and Urban Developemt counseling programs as part of its fiscal 2008 Transportation, Housing and Urban Development spending bill.
Sens. Charles Schumer (D-N.Y.), Sherrod Brown (D-Ohio) and Bob Casey (D-Pa.) proposed that $100 million be used for non-profit agencies to work individually with subprime borrowers who have fallen behind on their mortgage payments.
Their proposal and an amendment by Sens. Christopher Dodd (D-Conn.) and Kit Bond (R-Mo.) to include an additional $100 million for this effort were both approved by a voice vote.
“The current situation in the subprime mortgage market is untenable,” said Schumer. “The more we do to help solve it, the fewer families will be faced with losing their homes because of bad loans and dubious mortgage brokers.”
Casey noted that the counseling programs have a proven track record to help owners navigate the complicated process of contacting lenders, banks and legal services to modify their mortgage loans and ultimately save their homes from foreclosure.
“Home owners are being battered by the rising tide of foreclosures,” said Dodd. “This measure can act as a lifeline to help keep them in their homes.”
“This is a good step forward to help stem the tide of foreclosures without bailing out risky lenders and speculators from the market,” added Bond.
The spending bill, which must be reconciled with its House counterpart, contains funding levels for several key housing programs of interest to NAHB members:
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HUD, overall |
$38.75 billion |
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HOME program |
$1.970 billion |
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HOME formula grants |
$1.8 billion |
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Downpayment Assistance Program |
$25 million |
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Community Development Fund |
$4.060 billion |
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CDBG formula grants |
$3.77 billion |
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CDBF Section 108 loans |
$6 million |
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PATH Sec 205 exemption |
$0, eliminated |
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Policy Dev and Research overall |
$59 million |
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Section 8 tenant-based vouchers |
$16.598 billion |
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Section 8 project-based vouchers |
$5.976 billion |
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Section 8 incremental vouchers |
$0 |
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Section 8 formula |
12-month |
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HOPE VI |
$100 million |
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Rural Housing Econ Development |
$17 million |
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Housing Counseling Assistance |
$150 million |
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Brownfields Redevelopment |
$10 million |
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OFHEO |
$66 million |
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FHA Multifamily Loan Commitments |
$45 billion |
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FHA Overall Commitment Authority |
$185 billion |
During floor debate, Sen. Robert Menendez (D-N.J.) offered an amendment that was accepted by a voice vote to provide $380,000 in additional funding for the HUD secretary to implement guidance on assisting persons with limited English proficiency.
Also, an amendment offered by Sen. Mel Martinez (R-Fla.) and approved by the chamber adds $25 million back into the American Dream Downpayment Act, which received zero funding from the Senate Appropriations Committee.
The entire appropriations process remains in flux because President Bush has threatened to veto any spending bills, including the HUD bill, that exceed limits suggested by the Administration. In addition, none of the appropriations bills are expected to be completed by Sept. 30, the end of the current fiscal year.
Next week, Congress is expected to approve a six-week continuing resolution to keep the government funded and running through Nov. 9. If the President follows through on his veto threats over the FY2008 spending bills, Congress may subsequently decide to wrap all the bills into one giant omnibus spending package, effectively daring the President to veto the entire federal budget.
For more information, e-mail Jenna Hamilton at NAHB, or call her at 800-368-5242 x8407.
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