WASHINGTON — Senate appropriators approved $13 million in new funding to update the Federal Housing Administration's "outdated and unautomated" information technology systems, but rejected President Obama's proposed way of paying for it.

The Department of Housing and Urban Development has been seeking additional funding to modernize its own and the FHA's IT systems for several years.

But the Senate subcommittee again rejected the Obama administration's proposal to pay for the update by levying a 4-basis-point fee on lenders. This fee would cost a lender $40 on a $100,000 loan.

"The subcommittee bill rejects the administration's proposal to fund the IT modernization by way of a lender fee," said Chip Unruh, a spokesman for the Senate Transportation, Housing and Urban Development subcommittee.

Overall, the fiscal year 2017 appropriations bill approved by the subcommittee includes $273 million for HUD's IT systems — $23 million above the fiscal 2016 level, with $13 million of the increase going to FHA.

"This funding will ensure FHA is able to retire some of its current IT systems to effectively adapt to changes in the housing industry, economic trends, and post-housing-crisis legislation," according to a summary of the bill.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.