House Reforms Would Revitalize the FHA
The House Financial Services Committee on May 24 approved sweeping measures that would revitalize and reform the Federal Housing Administration's single-family mortgage insurance programs.
H.R. 5121, the Expanding American Homeownership Act of 2006, includes several provisions supported by NAHB. The bill, which will be sent before the full House for further consideration, would:
- Increase the limit for FHA-insured mortgages in high-cost areas
- Grant the FHA flexibility to establish zero or reduced downpayment requirements for its single-family programs
- Allow the FHA to establish a risk-based mortgage insurance premium pricing structure
- Permit the FHA to extend the maximum loan maturity to 40 years
- Authorize FHA to insure all of its single-family loan programs under the Mutual Mortgage Insurance Fund, which would clear the way for FHA to streamline the condo project approval requirements
NAHB Executive Vice President and CEO Jerry Howard testified in support of H.R. 5121 before the House Financial Services Committee’s Housing and Community Opportunity Subcommittee in early April. He noted that these provisions would give the FHA a greater ability to respond to the needs of borrowers and enable more working families to become home owners. To read Howard's full testimony, click here. (Document is in PDF format.)
In addition to the broader FHA reform effort, the House Financial Services Committee also approved H.R. 3043, the “Zero Downpayment Pilot Program Act.” This measure would eliminate the downpayment requirements for families and individuals who buy houses with FHA-insured mortgages.
NAHB supported similar legislation during the 108th Congress. However, that effort was stalled over broad funding concerns. The bill passed by the panel on May 24 would establish a pilot program for zero downpayment loans, limiting the number of mortgages to 50,000.
In another area of interest to NAHB, the House Financial Services Committee also passed legislation that would reauthorize the HOPE VI program through 2011. HOPE VI helps local communities to revitalize distressed public housing. NAHB supports continuation of the program, but the Administration has proposed eliminating it every year since fiscal year 2004.
To read this legislation, click here and enter H.R. 3043 in the box at the center of the page.
For more information, e-mail Michael Strauss at NAHB, or call him at 800-368-5242 x8252.