MAA Call to Action: Urge Congress to Refine and Improve H.R. 6644, as Amended in the Senate
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Take action now to urge the U.S. House of Representatives to stand firm in their efforts to refine and improve the Senate’s comprehensive 21st Century ROAD to Housing Act, H.R. 6644, as amended.
The ROAD to Housing Act (S. 2651) and the Housing for the 21st Century Act (H.R. 6644) – as individual measures – were strongly supported by MBA. Negotiated legislation containing provisions from both bills was passed by the full U.S. Senate on March 12.
The current Senate bill (H.R. 6644, as amended) has several provisions in need of change: (1) Section 602 (the prior “VALID” Act), which amends FHA’s Informed Consumer Choice Disclosure (designed to provide a price comparison between FHA and GSE products) to also include a comparison on VA Home Loan program pricing; (2) Section 101, which requires servicers on all government-backed loans (FHA, VA, RHS and PIH Section 184) to offer “foreclosure mitigation” counseling to all borrowers that become 30-days delinquent, and further requires the FHA Mutual Mortgage Insurance Fund (MMIF) to cover the costs of this counseling – not only for FHA, but for the other agencies as well; (3) Section 901 of the bill that threatens to negate the other pro-affordability/supply elements of the larger package by curtailing investment in rental communities (specifically BTR housing); and (4) Section 213, which, rather than including a promised increase, would implement an effective reduction in FHA’s multifamily loan limits.
Congressional leaders are now determining the full House’s response to the Senate’s comprehensive housing package. Urge your Representative to request that House leaders establish a process to refine and improve H.R. 6644, as amended, including the four sections of the bill listed above.
While MBA supports Section 602’s intent, the prescribed steps within the text, if enacted, will be costly to implement and are unlikely to result in any additional VA loan issuance given the processes lenders already have in place to inform consumers of their choices well before reading Uniform Residential Loan Application (URLA) documents.
Concerning Section 101, and by way of contrast with the language of the section, MBA has traditionally supported reasonable funding levels for housing counseling through the congressional appropriations process. Expenditures from the MMIF are limited by law to activities necessary to conduct the FHA single-family insurance program. Using the MMIF to pay for counseling for other agency programs does not appear to be permissible or wise.
MBA has serious concerns about Section 901, which would preclude firms owning more than 350 units from purchasing additional units. The section’s language includes carve-outs for certain types of BTR transactions, but with a requirement to dispose of those holdings after seven years, and with existing previously built-to-rent properties not explicitly excluded. The section’s definition of “single-family home” could also be read to include townhomes and other attached units of existing multifamily housing stock.
MBA is also concerned about apparent drafting errors in Section 213 of the package – the provision designed to raise Federal Housing Administration (FHA) multifamily loan limits – for the first time since 2003. Unfortunately, the negotiated language of Section 213 contains drafting errors that would oblige FHA to actually decrease the loan limits to levels below those calculated by HUD staff under current law authorities, thereby negating the underlying purpose of the section.
The U.S. House needs to amend Sections 901 and 213, respectively, as follows: (1) Remove Section 602 and reexamine alternative approaches; (2) Reexamine Section 101’s “foreclosure mitigation” counseling requirement – and FHA’s MMIF as the funding source; (3) Add an exemption within Section 901 ‘s BTR requirements for properties that are “purchased as a community of five or more contiguous rental units;” and, (4) Correct technical drafting errors regarding FHA multifamily statutory loan limits to fulfill Section 213 of the bill’s original intent.
ACT NOW to urge swift action for changes to these four sections within the Senate bill – H.R. 6644, as amended. We urge you to contact your Representative TODAY to have them request that House leaders establish a process to refine and improve the current Senate bill – and repair Sections 101, 213, 602, and 901.
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