(RECAP: The purpose of the FHA is “to help creditworthy low income and first time homebuyers, individuals and families often denied traditional credit, to obtain a mortgage and buy a home.” This is achieved through the FHA guarantee provided to lenders who originate FHA backed loans, which provides the FHA will pay out the balance of a mortgage loan in the event of an uncured default. This significantly lowers and practically eliminates the risk of FHA loans to the lender, which then allows them to offer higher loan-to-value ratios and more attractive interest rates to borrowers who would normally not have access to similar terms. This system was successful and aided in achieving the FHA’s goals of promoting home ownership, but this is changing as the DOJ has begun to bring investigations and actions against lenders under the Fake Claims Act.)

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(RECAP: Last week, Representative Kuster (D-NH) introduced the Rural Housing Preservation Act of 2016, H.R. 4908, which seeks to provide relief to rural multifamily developments financed under the U.S. Department of Agriculture (USDA) Section 515 Rural Rental Housing Loan Program that will lose rental help in the future due to pre-paid or maturing mortgages. Since 2004, USDA appropriations bills have included provisions to make residents of properties with pre-paid mortgages eligible for USDA Section 542 housing vouchers. But, residents in maturing mortgage properties are not eligible for Section 542 vouchers under these provisions. H.R. 4908 would authorize USDA to provide vouchers to eligible residents in properties with pre-paid and maturing mortgages.)

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(RECAP: Yesterday, Senate Banking Committee Chair Richard Shelby (R-AL) requested that both the Government Accountability Office (GAO) and the Congressional Budget Office (CBO) compose reports on matters relating to the Federal Housing Finance Agency (FHFA) and the government-sponsored enterprises (GSEs), Fannie Mae and Freddie Mac. In a press release announcing the requests, Shelby suggests that the reports will help Congress adequately oversee FHFA and the GSEs and, “ensure that Congress takes steps to protect American taxpayers from risk.” Shelby questions that CBO complete its report by July, and that GAO try its best to end its work, which Shelby anticipates will include multiple reports, by November 1.)

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