House and Senate banking committees last week completed work on comprehensive housing bills, and the House version contains a provision that the Mortgage Bankers Association believes will help spur Federal Housing Administration business.

The MBA has aggressively battled the Department of Housing and Urban Development since it hiked insurance premiums and limited to 57% the amount of closing costs that can be financed.

Insurance premiums on FHA refinancings were cut back in May, and the Housing and Community Development Act (H.R. 5334) approved June 16 by the House Banking, Finance and Urban Affairs Committee prohibits the HUD secretary "from using discretionary authority to establish any limit on the amount of closing costs that can be financed under an FHA-insured single family loan."

The MBA had hoped the committee would cut back even further on insurance premiums, but chief lobbyist Michael J. Ferrell said he was pleased with what the committee did. The MBA's highest priority was preventing inclusion of a bill (H.R. 3542), sponsored by committee Chairman Henry B. Gonzalez, D-Texas, that would have required payment of interest on escrow accounts. Keeping that measure off the statute books has been MBA's highest legislative priority, and no attempt was made to attach it to the housing bill.

The House committee's bill contains another priority item of the MBA - an increase in the maximum mortgage amount that can be insured by the FHA. The bill would establish it at the lesser of 95% of the median single-family house prices in a geographic area or 75% of the maximum for the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, which works out to $152,000.

Meanwhile, the Senate Banking, Housing and Urban Affairs Committee concentrated principally on multi-family housing.

The package adopted several initiatives recommended by HUD Secretary Jack Kemp, including the Moving to Opportunity Program, designed to help families with children move out of areas with high concentrations of poverty, and a program that would permit the use of rental assistance vouchers by first-time home buyers for mortgage payments.

The panel also approved Kemp's plan to provide small residential facilities for seriously mentally ill, homeless persons.

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