FHA Reform Bill Passed by Senate
Posted by admin under: Main Dec 15
The U.S. Senate passed legislation today that would make FHA loans more readily available to a large number of distressed homeowners who are facing an unprecedented number of interest-rate resets.
The so-called “The FHA Modernization Act of 2007″, approved overwhelmingly by a 93-1 vote, would cut the required down-payment for FHA loans in half, from 3% to 1.5%, and also raise the maximum loan amount the FHA can insure.
The Senate bill will also raise the maximum loan size the FHA can insure in high-cost areas from $362,790 to $417,000, the conforming limit currently used by mortgage financiers Fannie and Freddie.
“This legislation is the perfect example of the kind of help Americans are looking for,” Senator Charles Schumer, a New York Democrat who co-sponsored the bill, said on the Senate floor today. “It is definitely and desperately needed.”
The bill will also allow the FHA to insure more reverse mortgages, and simplify requirements for condominium loans.
A similar bill was passed by the House in September, so now the two chambers will have to come to an agreement before sending the final bill to the White House for approval.
“We’re pleased that the U.S. Senate passed a bill today that would give FHA some of the additional flexibility it needs to provide more families with a safe, affordable mortgage financing option,” White House Press Secretary Dana Perino said in a statement.
The FHA, created in 1934 to help low-income borrowers, currently insures about 3.7 million mortgages, but its share of the single-family mortgage market has dwindled to roughly 4 percent, down from 19 percent over 10 years ago as subprime lending gained in popularity.
If you’re interested in staying abreast of the latest mortgage news, consider our free e-mail updates!
Source: FHA Reform Bill Passed by Senate
Saturday, December 15th, 2007 at 5:35 am and is filed under Main. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.