Important Legislative Update!
 

The Senate today passed their version of FHA reform – S 2338.  Although it has many similarities, this bill is different than the FHA legislation passed by the House (HR 1852 and HR 1427).  The key points of the legislation include:

• Raising loan limits on all FHA loans including reverse mortgages
  
• Lowering down payment requirements on FHA loans
• Removing the cap on allowable reverse mortgage originations
  

 

Click Here for a summary of the Senate bill

 
Also, you can go directly to the Library of Congress THOMAS web site and search for S 2338, HR 1852, and/or HR 1427 to read the full text of all three bills.
 

The next step for all these bills is for House and Senate negotiators to try and come to an agreement on how the final version of FHA reform will look.  Once the House and Senate come to an agreement, the final version of the bill will be sent to the President for his approval.  Being that we are coming up against the end of the year holiday break, it is unlikely that FHA reform will pass this year, but if the parties are motivated enough to do the right thing, who knows what can happen!
Keep Reading...

Congress created the Federal Housing Administration in 1934. At this time, nearly two million construction workers were laid off. Only four out of ten people owned their own home. In addition, mortgage loan terms were outrageous. Borrowers had to put 50 percent down, and the note ballooned in 3 to 5 years. So the mission of the FHA was to encourage home ownership.

The FHA became a part of HUD, which is the Department of Housing and Urban Development, in the year 1965. In the mid-1980’s, the FHA transitioned to what we call direct endorsement and began approving lenders to underwrite and close their own loans. Prior to this time, the FHA did have a hand in the process of the loan. Keep Reading...