WASHINGTON - The Mortgage Bankers Association of America is calling on Congress to pass legislation aimed at extending a provision that lowers the down payments on guaranteed FHA loans.

Without it, the trade group said, lenders could lose 200,000 loans a year as borrowers get priced out of the housing market.

The Streamlined FHA Down Payment Calculation provision expires Sept. 30 after two years as a pilot program. The House voted 417 to 8 on April 6 to make the lower down payments permanent in the American Homeownership and Economic Opportunity Act, a broad bill sponsored by Rep. Rick Lazio, R-N.Y. The Clinton administration supports the bill.

But Rep. Lazio's bill does not have a sponsor in the Senate, so that's where the mortgage bankers group is targeting its lobbying. It wants its members to write and visit their representatives, and it is to begin an advertising campaign next week in trade and political newspapers, including Roll Call. Howard Glaser, who heads the mortgage group's newly revamped government relations team, said this is the first time in years that the MBA has advertised to support a lobbying effort.

The pilot program sets the down payments at 3% of the loan total; previously, down payments varied depending on loan size. Generally the program benefits those borrowing more than $125,000; some 400,000 loans above that amount will have been made by the time it ends, the MBA said.

Any FHA loans closed by Sept. 30 qualify for the pilot program pricing.

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