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House
and Senate Move FHA Reform Measures
The House of Representatives on September 18 passed H.R.
1852, a bill to revitalize HUD’s Federal Housing
Administration (FHA) and its program of mortgage insurance.
Originally sponsored by Reps. Maxine Waters (D-CA) and
Barney Frank (D-MA), the bill will allow FHA to serve
more subprime borrowers with affordable financing, draw
back to FHA borrowers using predatory loans, give struggling
homeowners a chance to refinance their mortgages, and
increase the FHA loan limit. The bill also authorizes
the use of up to $300 million from excess FHA profits
for an affordable housing trust fund.
The Senate Banking Committee passed a different FHA modernization
bill on September 19. Sponsored by Chairman Chris Dodd
(D-CT), the unnumbered bill would reduce down payment
requirements and raise the FHA-insurable loan limit to
$417,000. The House bill has a different loan limit: the
lower of either 125 percent of the median home price in
the area or 175 percent of the Fannie Mae conforming loan
limit in high-cost areas. The Senate bill does not include
funds for an affordable housing trust fund.
Links to More Information
Posted:September 19, 2007
Updated: September 20, 2007
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