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Mortgage News Daily combines the expertise of some of the housing industry's leading minds with the power of social media to offer an always lively, constantly evolving web community. MND communicates breaking news, streams video, and provides expert opinion and commentary to a community of interested market professionals and curious consumers.House Set to Extend Rural Home Loan Guarantee Program
The continued availability
of government guaranteed mortgages for rural homebuyers was virtually assured
yesterday when the House Financial Services Committee voted to approve H.R.
5017. The unanimous vote will send the
Rural Housing Preservation and Stabilization Act of 2010 to the full House of
Representatives where sources said it was fast tracked for a vote as early as
next week.
If passed, the bill will
correct the Section 502 Single Family Housing Guaranteed Loan Program to make
it self-funding. Section 502 assists
homebuyers living in rural areas to obtain affordable mortgages guaranteed by the
Department of Agriculture (USDA). These loan
guarantees have become enormously popular during the financial crisis and consumer
demand has tripled the annual number of loans that are typically issued each
year. The program is set to exhaust its available
funds within days. Under the new
legislation, lenders will pay up to a 4 percent premium for the guarantee at
the time the loan is initiated which will enable the financing of the program
to move from a combination of government funding and industry fees to a
self-sustaining initiative. The bill authorizes the department to guarantee up
to $30 billion in loans in FY 2010.
In order to qualify for the
program an applicant must have good credit and reliable and adequate income sufficient
to sustain mortgage payments. The average
guarantee in 2009 was for a $112,000 mortgage.
In an announcement of the
bill's passage the Committee said that the program provides a vital source of
mortgage credit for people living in rural communities where low and
moderate-income residents often have fewer credit options than households in
urban areas. The USDA program aims to
fill that void and lower the costs of homeownership by giving rural areas
access to a home loan guarantee program.
The bill was sponsored by
Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services
Subcommittee on Capital Markets, Insurance, and Government Sponsored
Enterprises. He said of the bill, "Since
its creation in 1987, USDA's affordable rural home loan guarantee program has
helped hundreds of thousands of families to realize the American dream of
homeownership, including many in Northeastern Pennsylvania. As a result of the
unprecedented demand, the program is now unfortunately running out of
money. At no cost to taxpayers, my bill will preserve the access of
millions of families living in America's heartland to needed USDA loan
guarantees, so that they can continue to buy homes with affordable
mortgages. Without action, too many families in rural America will have
no options for getting home loans. We cannot allow that to happen."
READ MORE
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This email was sent to you by:
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Anonymous Anonymous |
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Message:
YOUR MESSAGE HERE
House Set to Extend Rural Home Loan Guarantee Program
The continued availability
of government guaranteed mortgages for rural homebuyers was virtually assured
yesterday when the House Financial Services Committee voted to approve H.R.
5017. The unanimous vote will send the
Rural Housing Preservation and Stabilization Act of 2010 to the full House of
Representatives where sources said it was fast tracked for a vote as early as
next week.
If passed, the bill will
correct the Section 502 Single Family Housing Guaranteed Loan Program to make
it self-funding. Section 502 assists
homebuyers living in rural areas to obtain affordable mortgages guaranteed by the
Department of Agriculture (USDA). These loan
guarantees have become enormously popular during the financial crisis and consumer
demand has tripled the annual number of loans that are typically issued each
year. The program is set to exhaust its available
funds within days. Under the new
legislation, lenders will pay up to a 4 percent premium for the guarantee at
the time the loan is initiated which will enable the financing of the program
to move from a combination of government funding and industry fees to a
self-sustaining initiative. The bill authorizes the department to guarantee up
to $30 billion in loans in FY 2010.
In order to qualify for the
program an applicant must have good credit and reliable and adequate income sufficient
to sustain mortgage payments. The average
guarantee in 2009 was for a $112,000 mortgage.
In an announcement of the
bill's passage the Committee said that the program provides a vital source of
mortgage credit for people living in rural communities where low and
moderate-income residents often have fewer credit options than households in
urban areas. The USDA program aims to
fill that void and lower the costs of homeownership by giving rural areas
access to a home loan guarantee program.
The bill was sponsored by
Congressman Paul E. Kanjorski (D-PA), Chairman of the House Financial Services
Subcommittee on Capital Markets, Insurance, and Government Sponsored
Enterprises. He said of the bill, "Since
its creation in 1987, USDA's affordable rural home loan guarantee program has
helped hundreds of thousands of families to realize the American dream of
homeownership, including many in Northeastern Pennsylvania. As a result of the
unprecedented demand, the program is now unfortunately running out of
money. At no cost to taxpayers, my bill will preserve the access of
millions of families living in America's heartland to needed USDA loan
guarantees, so that they can continue to buy homes with affordable
mortgages. Without action, too many families in rural America will have
no options for getting home loans. We cannot allow that to happen."
READ MORE
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