Mortgage Bankers urge action

September 16, 2002

MBA applauds legislation that would slim downpayment requirements for FHA-insured mortgages

Inman News Features

The Mortgage Bankers Association of America applauded the Senate Banking Committee for its vote late yesterday to bring to the Senate floor a bill it believes will advance affordable housing in America.

The FHA Downpayment Simplification Act of 2002 (S. 2339) introduced by Senate Banking Committee Chairman Paul S. Sarbanes (D-MD) and Sen. John Ensign (R-NV), would amend the National Housing Act to permanently simplify the downpayment requirements for FHA-insured mortgages for single-family homebuyers.

The Committee also added an amendment to the bill that would repeal the 50 percent increase in the Ginnie Mae guarantee fee, scheduled to go into effect in 2004.

A second amendment incorporating a bill introduced last month by Sen. Jon Corzine (D-NJ), to index and increase multifamily loan limits in high-cost areas, was offered as an amendment during the mark-up and subsequently withdrawn. Corzine's bill would amend the National Housing Act to require HUD to index the multifamily mortgage limits each year to the annual construction cost index of the Bureau of Census.

The Committee asked MBA and other industry trade associations to supply economic data on the different formulas for determining how to index the FHA multifamily loan limits.

"We encourage the Senate to pass this housing bill, so that the FHA single-family housing program can continue to serve the broadest range of borrowers, especially first-time, minority and low- to moderate-income borrowers," said Kurt Pfotenhauer, MBA's SVP Government Affairs.

The Housing Affordability for America Act (H.R. 3995), which includes these provisions and many others, introduced by Rep. Marge Roukema (R-NJ) was reported out of the House Financial Services Committee in July, but has yet to be scheduled for a floor vote.

Copyright: Inman News Service

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