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Builders Highlight Need for FHA Reform
Testifying on April 19 before the House Financial Service Committee's Housing and Community Opportunity Subcommittee, Bill Killmer, NAHB's group vice president for advocacy, called on Congress to enact legislation that would reform and revitalize the Federal Housing Administration's single-family mortgage insurance programs. Killmer said that statutory and regulatory constraints have limited the FHA's ability to respond to the needs of borrowers, resulting in many home buyers ending up with inappropriate mortgages. "Had the FHA been in a better position to respond to changing market forces in the past few years, the subprime situation might not be as severe as it is today," he said.
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NAHB Vice President Bill Killmer, far right, testifies on FHA reform.
Photo by Herman Farrer
| With two FHA revitalization proposals before the subcommittee, H.R. 1852 and H.R. 1752, Killmer told lawmakers that NAHB does not favor one bill over the other, but instead seeks "comprehensive FHA reform — period!" Specifically, NAHB is urging Congress to take the following actions:
- Increase the current limit for FHA-insured mortgages to enable deserving potential home buyers to buy homes in high-cost areas.
- Allow the FHA to establish a risk-based mortgage insurance premium pricing structure.
- Grant the FHA authority to establish greater flexibility in setting downpayment requirements for its single-family programs as long as they are operated on an actuarially sound basis.
- Ensure that sufficient funds are appropriated on an ongoing basis for housing counseling.
- Permit the FHA to extend the maximum loan maturity to 40 years to enable borrowers to reduce their monthly mortgage payments.
- Revise the FHA's requirements for condominium loans, which are often burdensome and differ significantly from mortgage loans for detached single-family homes.
- Remove the existing 275,000 loan volume cap on FHA's Home Equity Conversion Mortgages, or "reverse mortgages," while increasing the maximum loan to the Fannie Mae/Freddie Mac conforming loan limit.
- Provide the HUD secretary additional flexibility to increase the FHA multifamily mortgage loan limits in high-cost areas.
For more information, see NAHB's press release, or contact Scott Meyer at 800-368-5242 x8144.
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An Opportunity to Weigh In on Health Care
To highlight America’s health care crisis, Congress has designated the week of April 23 as “Cover the Uninsured Week.” More information on this event can be found by clicking here. NAHB believes this presents a unique opportunity for the building community to emphasize the importance of enacting small business health care reform. A sample op-ed stating the need to act on this issue is available online. Concerned members can attach their name to the article and send it to their local media outlets. In addition to the op-ed, a short background paper is available online that contains key health care facts and a legislative framework for meaningful reform. For more information, e-mail Erin Tario or call her at 800-368-5242 x8413.
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Senate, House Hearings Highlight Energy Efficiency, Climate Change
Sen. Jeff Bingaman (D-N.M.), chair of the Senate Energy and Natural Resources Committee, introduced a bill this week that would expedite lagging Department of Energy (DOE) rulemakings on a number of home appliance standards and allow states to preempt the DOE on product standards if DOE fails to issue them. The Energy Efficiency Promotion Act also would establish a block grant program, modeled after the Community Development Block Grant program, for states to implement energy-efficiency programs for the building and transportation sectors, as well as mandate sustainable design standards for all federal buildings in order to achieve carbon neutrality by 2030.
Several Senate and House committees also held hearings during the week on energy- and climate change-related issues ranging from carbon sequestration to national security and insurance:
- Scientists on the Intergovernmental Panel on Climate Change (IPCC) presented data from the panel’s second report to the House Science and Technology and Senate Environment and Public Works committees on April 17. The report focused on the impact of global climate change on species/wildlife, sea level rise and whether humans have the capacity to adapt to these changes.
- The House Select Committee on Energy Independence and Global Warming, chaired by Rep. Ed Markey (D-Mass.), convened its first public hearing on the impact of climate change on national security on April 18.
- The Senate Homeland Security and Government Affairs Committee, chaired by Sen. Joe Lieberman (D-Conn.), held its first climate change hearing on the impact of catastrophic weather events on both federal and private insurance losses on April 19. Officials from the Federal Emergency Management Agency and the Government Accountability Office, along with a representative from the private insurance industry, testified about the risks to property owners from insurance programs’ inability to cover future substantial losses attributed to weather disturbances from climate change.
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IRS, Treasury Told to Develop Plan to Close ‘Tax Gap’
Chairman Max Baucus (D-Mont.) of the Senate Finance Committee told Treasury Henry Paulson and Internal Revenue Service (IRS) Commissioner Mark Everson during hearings this week to develop a plan to close the “tax gap,” an estimated $290 billion in tax revenues that are not collected annually. During the hearing, Baucus demanded that Treasury come up with a plan to reach a 90-percent compliance level by July 18. (Current compliance is about 85 percent.) When first questioned, Treasury’s Paulson and the IRS’ Everson both expressed skepticism at being able to bring in more than about 1% of that amount without imposing draconian measures on taxpayers in order to collect it, which triggered the chairman’s demand for a plan.
NAHB has weighed in on several proposals put forth by the Joint Committee on Taxation to close the tax gap that could potentially be very burdensome for small businesses and home owners.
During questioning by Sen. Ron Wyden (D-Ore.), Secretary Paulson said the Administration was not offering a major tax reform proposal now or in the near future — comments that echoed what Paulson told NAHB’s leadership earlier this year and a good sign that the recommendations of the President’s Advisory Panel on Tax Reform will not be carried by the Administration as part of any tax reform proposal.
NAHB continues to monitor congressional tax reform activity, such as reforming the Alternative Minimum Tax, which could serve as vehicles for larger tax reform.
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House Passes Small Business Disaster Loan Reform
The House on April 18 passed the RECOVER Act, a bill to overhaul the Small Business Administration’s (SBA) disaster loan program. The SBA was widely criticized for its failure to provide disaster relief loans to small business following the Gulf Coast hurricanes. The new legislation would require the SBA to create a position within the agency dedicated to disaster planning and require the federal government to increase the limit for disaster loans from $1.5 million to $3 million.
The RECOVER Act would require the SBA to create a 1,000-person SBA “disaster reserve corps” and centralize the application and loan tracking system to ensure that small business owners receive a more timely response from the federal government when applying for loans to help then recover from a disaster.
NAHB will continue to monitor the progress of the RECOVER Act and the Senate’s companion legislation to ensure that both chambers move towards meaningful disaster loan reform. To read the legislation, click here. For more information, contact Kelly Pike at 800-368-5242 x8420.
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NAHB ‘First 110 Days’ Grassroots Campaign Brings Builders, Congressmen Together
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Rep. Christopher Murphy (D-Conn.), left, met with members of the the Home Builders Association of Northwest Connecticut to discuss federal housing issues as part of "The First 110 Days."
| Builders met with freshman congressman as part of NAHB’s “The First 110 Days” grassroots campaign in which NAHB members met with incoming freshmen to discuss housing issues during the first 110 days of the 110th Congress. The campaign ends next week.
In one successful meeting recently, members of the Home Builders Association of Northwest Connecticut met with first-term congressman Christopher Murphy (D-Conn.) at a job site in Torrington, Conn. and later at the HBA’s office to discuss housing finance, immigration and the environment.
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NAHB's Premier Lobbying Event to Take Place on June 6
Don't forget to mark your calendar for Wednesday, June 6 — the NAHB Legislative Conference which kicks off the association's spring board meeting in Washington, D.C. The annual event provides a unique opportunity to discuss legislative issues that will have a direct impact on your business's bottom line with your federal representatives and senators on Capitol Hill. Read more about NAHB's most important grassroots event of the year and register to participate here; or contact Jessica Boyce at 800-368-5242 x8334.
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