House Extends Simplified FHA Mortgage Calculation 

September 19, 2000

Lowers Borrowing Costs for FHA, Rural Housing Service Homebuyers

The House has approved two housing bills managed by Rep. James A. Leach, chairman of the House Banking Committee, to save money for borrowers under Federal Housing Administration (FHA) and Rural Housing mortgage loan programs.

H.R. 5193, the FHA Downpayment Simplification Extension Act, introduced by Rep. Rick Lazio, chairman of the Housing Subcommittee, extends for 30 days an existing statutory provision which provides for a simplified calculation of downpayments by new homeowners closing on FHA-insured mortgage loans. The streamlined method provides savings for homebuyers and a calculation method uniformly understood by the mortgage industry and consumers.

H.R. 3834, the Homeowners Financing Protection Act, introduced by Rep. Robert E. Andrews, allows borrowers to refinance Rural Housing Service (RHS) single-family mortgage loans to take advantage of lower interest rates.

"According to the General Accounting Office, as of May 31, 2000, approximately 9,100 RHS loans exist with an interest rate of 13 percent or higher; 65,000 loans exist with an interest rate of at least 9.5 percent," Leach said during debate on the bill on the House floor. "It is clear that these borrowers would benefit from refinancing using the guaranteed program by lower interest rates and therefore lower monthly payments."

Both bills passed the House by voice vote.

Source: House Banking Committee


Contact ALTA at 202-296-3671 or communications@alta.org.

SoftPro, based in Raleigh, NC, offers a mature suite of products, designed specifically for the closing and title industry. Our mission is to serve our client base, with best-in-class products and services. Our products are modular so we don't force you to buy anything you don't need. You can always add on as your business grows. Unlike other software companies, we view the sale as the beginning of the relationship rather than the end. North American Title Insurance Company (NATIC) is a seasoned title insurance underwriter, helping title agents to achieve their individual business goals for more than 50 years. Today, the company conducts real estate settlement services in 39 states and the District of Columbia through a network of experienced, independent agents.