House Committee to Vote Today on FY2020 T-HUD Bill; MBA Urges Support

The House Appropriations Committee is scheduled to meet this morning to consider a Fiscal Year 2020 appropriations bill that would provide FHA with Mortgage Bankers Association-supported staffing and systems upgrades.

Ahead of the markup, MBA sent a letter to Committee leadership and members urging them to support the bill.

MBA Senior Vice President of Legislative and Political Affairs Bill Killmer noted that while the FY 2020 Transportation, Housing and Urban Development (T-HUD) appropriations bill provides $130 million for HUD’s administrative contract expenses, MBA continues to support HUD’s initial budgetary request for $150 million.

“MBA continues to staunchly support providing the Federal Housing Administration (FHA) with the resources, both in staffing and systems upgrades, it requires to maintain its important, countercyclical role as a government-backed mortgage insurer,” Killmer wrote, noting MBA has long been a proponent of adequate funding for staffing, project management and potential improvements that would allow the agency to better manage its operations and the risks associated with its Mutual Mortgage Insurance Fund.

MBA also expressed support for the $300 million within the bill allocated to HUD’s Cybersecurity and Information Technology Fund to help the agency better meet its acute information technology needs on a broad basis, as well as the specified $20 million from that Fund to be used in the ongoing upgrade of FHA’s decades-old single-family IT infrastructure.

“These IT systems have long been in need of modernization, and the directed funds represent another crucial step forward to help the FHA improve its quality assurance controls and the integrity of its systems,” Killmer said.

With respect to FHA’s multifamily and healthcare finance programs, MBA supports the $30 billion in commitment authority for the General and Special Risk Insurance Fund in its FY 2020 proposal, as well as adequate funding for rental assistance, particularly Section 8 Project Based Rental Assistance. “Together, these programs permit private sector lenders to continue to finance workforce and affordable apartments and residential healthcare facilities that serve millions of Americans,” MBA said.

With respect to Ginnie Mae, MBA continues to support an increased level of funding for staffing, training and technology needs; Killmer said while the $27 million proposed in the T-HUD budget is consistent with FY 2019, MBA believes Ginnie Mae’s full request for $28.4 million for these purposes is more appropriate.

“Given Ginnie Mae’s stated role in providing liquidity targeted to low- and moderate-income families, first-time homebuyers, renters, veterans and rural households, this funding level is necessary to prudently manage the increased loan volume in the single-family and multifamily mortgage markets,” the letter said. “In addition, in recent years, market share for FHA, VA Home Loans Program, and Rural Housing Service single-family lending has continued to shift towards a more diversified base of smaller lenders. MBA believes this to be a positive trend for Ginnie Mae that reduces concentration risk in the program, but cautions it may require increased oversight or funding in the near future to support Ginnie Mae’s ongoing counterparty risk management of the expanded issuer base.”

MBA also expressed support for provisions that maintain for a sixth year a prohibition on federal funds being used to facilitate eminent domain seizures of performing mortgage loans. By enacting this prohibition for the past five fiscal years, Congress was able to effectively defuse this threat. “If the ban were not to be not renewed, the threat posed by these schemes would undoubtedly return,” MBA said. “The introduction of this new risk to the housing finance system would severely impact the return of private capital to our markets, and would undermine future congressional efforts to successfully transition to a new housing finance system.”

The letter also supports the provision funding $60 million in housing and homeownership counseling. “These funds are critical to assisting homeowners facing foreclosure, helping first-time homebuyers navigate the challenges of the purchase process and counseling for reverse mortgages (a program requirement) for seniors, a traditionally high-risk group for financial fraud,” MBA said.

The markup begins at 10:30 a.m. ET in 2459 Rayburn House Office Building and can be accessed online at https://appropriations.house.gov/subcommittees/agriculture-rural-development-food-and-drug-administration-and-related-agencies-116th.