The Senate may vote as early as today on a controversial plan to expand the Department of Housing and Urban Development's FHA mortgage insurance program.
The provision, contained in the 1999 spending bill for HUD, would let the FHA program insure loans of up to roughly $198,000 in high-cost housing markets and $109,000 in the lowest-cost areas. Debate on the bill began Monday.
Sen. Herb Kohl, D-Wis., and Sen. Lauch Faircloth, R-N.C., are expected to propose an amendment striking down the increased loan ceilings in all but the lowest-cost markets. That would leave the FHA loan ceiling unchanged at $170,000 in high-cost markets.
The two senators also are expected to propose that mortgage bankers pay a higher fee for the government's credit guarantee when FHA loans are bundled into mortgage securities. The guarantee fee on so-called Ginnie Mae securities is currently 6 basis points, and Sens. Kohl and Faircloth are expected to propose a fee of as much as 15 basis points.
The House Appropriations Committee's HUD spending bill, which also contains a provision to expand FHA insurance, will probably be voted on next week.