By Eugene T. Lowe
October 9, 2006

The U.S. Conference of Mayors and several other national organizations are urging the Senate to pass S. 3535, the Expanding American Homeownership Act, when Congress reconvenes in November. The House of Representatives passed companion legislation, H.R. 5221 on July 25, 2006. The senate and house bills would modernize the Federal Housing Administration (FHA) “and bring it into the 21st Century.” The national groups are calling for legislation to be enacted before the 109th Congress adjourns.

In a letter to the Senate leadership, the Conference of Mayors, along with three other national organizations, said that passage of S. 3535 “…would restore FHA to its appropriate place in our nation’s housing finance system. Among its provisions, the bill would give FHA more flexibility and freedom in the development of innovative mortgage insurance products, including flexible downpayment loans, and adjust mortgage loan limits in high-cost markets to reflect rising house prices and the increased costs associated with new construction. The bill would also modernize the program by allowing FHA to price loans according to each borrower’s risk.”

The U.S. Conference of Mayors adopted a resolution at the 74th Annual Conference of Mayors Meeting in Las Vegas strongly supporting modernization of FHA. Other groups signing the letter to the Senate included: the National Association of Counties, the National Association of Local Housing Finance Agencies, and the National Community Development Association.

Right before the House recessed for the mid-term elections, it passed three housing bills. On September 27, H.R. 5347, the HOPE VI Reauthorization Act of 2006 was passed. Introduced by Representative Christopher Shays (CT), the bill reauthorizes HOPE VI through September 30, 2007. Also on September 27, the House passed H.R. 6115, the Mark-to-Market Extension Act of 2006. The Mark-to-Market program, which would have expired September 30, was extended through November 17. Again on September 27, the House passed the FHA Multifamily Loan Limit Adjustment Act of 2006. The bill allows FHA to insure multifamily dwellings up to 170 percent in high cost areas.