House Approves MBA-Opposed USDA Fee Amendment

The House this week unanimously approved a bill that would improve effectiveness of public housing program oversight; however, the bill included a Mortgage Bankers Association-opposed amendment that imposes a permanent fee on USDA mortgage program borrowers.  

By a 427-0 vote, the House approved H.R. 3700, the Housing Opportunity through Modernization Act, which updates and improves outdated rules and regulations to give state and local housing agencies and private owners more flexibility to meet key program objectives ( The Congressional Budget Office said the bill would save taxpayers $311 million over five years.  

“Today is the first step in making meaningful reforms to our nation’s housing programs,” said Rep. Blaine Luetkemeyer, R-Mo., chair of the House Financial Services subcommittee on Housing and Insurance, who sponsored the bill. “I am pleased that my colleagues, on both sides of the aisle, came together to support a comprehensive bill that modernizes an outdated system and begins to break a status quo that serves too few at the cost of too many.”  

However, the House also approved a controversial amendment introduced by Rep. Ruben Hinojosa, D-Texas, that imposes a permanent fee to fund USDA Section 502 Single-Family Loan program Guaranteed Underwriting System, using technology to enhance loan and lender oversight, metrics and programmatic controls. The amendment covers costs of developing and maintaining the GUS; Hinojosa estimated the fee, ranging from $25-50 per loan, could generate up to $4 million per year, beginning in 2018.  

“This efficiency upgrade will allow USDA staff to allocate the necessary time and resources to the most complex underwriting decisions,” Hinojosa said in a statement ( “I am proud that this amendment passed, as it will enhance H.R. 3700 and expand housing opportunities for our rural families in South Texas and throughout the United States.”  

But MBA opposed the amendment, arguing that the permanent fee would raise the cost of homeownership on rural families served by USDA.  

“MBA wholeheartedly supports ensuring USDA receives full funding for its technology and staffing needs,” wrote MBA Senior Vice President of Legislative & Political Affairs Bill Killmer in a letter to House members. “However, we believe Congress should continue to fund these priorities through the annual appropriations process, not through an unprecedented and permanent fee that will undoubtedly be passed on to borrowers and raise the cost of homeownership.”  

Killmer noted that Congress has consistently rejected these types of off-budget fees and for decades has chosen to fund USDA’s administrative costs through the annual appropriations process.  

“A fee on single-family lenders, as proposed by the Hinojosa amendment, would set a dangerous precedent, wherein those that administer federal housing programs would tax the very borrowers they are intended to serve in order to fund priorities they have failed to convince Congress to support,” Killmer wrote. “By raising the cost of homeownership on the rural families served by USDA, the Hinojosa amendment represents a flawed approach to funding these vital housing programs.”   The bill must also be passed by the Senate; a vote has not yet been scheduled.