House Votes to Revitalize FHA Single-Family Insurance
With the full support of the nation’s home builders, the U.S. House of Representatives on July 25 voted overwhelmingly to approve broad-based 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.
Prior to the vote, NAHB sent a letter to the full House urging lawmakers to approve the legislation and also contacted every member of the Republican Study Committee to urge support for the bill and explain the importance of an invigorated FHA. The bill, which was subsequently approved by a 415-7 vote, 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
- Revise the FHA’s requirements for condominium loans, which are often burdensome and differ significantly from mortgage loans that are secured for detached single-family homes
NAHB Executive Vice President and CEO Jerry Howard testified before Congress in support of the legislation earlier this year, noting 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.
Housing and Community Opportunity Subcommittee Chairman Bob Ney (R-Ohio), who sponsored the bill, said in a statement that “modernizing FHA will improve competition in the prime home loan mortgage industry and effectively assist the industry in combating abusive and discriminatory lending practices. This bill helps further increase the country’s homeownership rate, especially among low- and moderate-income and minority families.”
NAHB will now urge the Senate to approve companion legislation S. 3535.
To read legislation, click here and enter the bill number in the box at the center of the page.
For more information, e-mail Scott Meyer at NAHB, or call him at 800-368-5242 x8144.