[Congressional Record Volume 141, Number 179 (Monday, November 13, 1995)]
[Senate]
[Page S17003]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. D'Amato (for himself, Mr. Mack and Mr. Bryan):
  S. 1409. A bill to amend section 255 of the National Housing Act to 
extend the mortgage insurance program for home equity conversion 
mortgages, and for other purposes; to the Committee on Banking, 
Housing, and Urban Affairs.


   the home equity conversion mortgage program extension act of 1995

 Mr. D'AMATO. Mr. President, I introduce The Home Equity 
Conversion Mortgage Act of 1995 and express my appreciation to Senators 
Mack and Bryan for their cosponsorship of this important bill. This 
legislation would provide a 5-year extension for a much needed Federal 
Housing Administration [FHA] mortgage insurance program which is of 
great benefit to elderly homeowners.
  The Home Equity Conversion Mortgage [HECM] Insurance Demonstration 
Program offers elderly homeowners the opportunity to borrow against the 
equity in their homes. This effective program is designed to assist our 
Nation's elderly who have substantial equity in their property but have 
incomes too low to meet ordinary or extraordinary living expenses. A 
senior citizen can receive cash through this reverse mortgage in the 
following four ways: A lump sum; a lifetime guaranteed monthly payment; 
a line of credit to be accessed by personal checks; or a combination of 
monthly payment and line of credit options. These mortgages are 
originated by FHA-approved lenders, insured by the FHA and purchased by 
the secondary mortgage market. The HECM program represents an ideal 
public/private partnership in which needy citizens are aided without 
cost to the Federal Government.
  The HECM program allows our Nation's elderly to draw an income from 
their home investment. It offers seniors aged 62 and older the 
opportunity to support themselves without having to leave the homes 
they love. Without this program, elderly homeowners with insufficient 
incomes might be forced to sell their homes and spend their golden 
years elsewhere. Since the program's inception, over 14,000 loans have 
been closed or are pending. The median age of program participants is 
76 years old. Borrowers are generally low-income and dependent on 
Social Security benefits.
  The Home Equity Conversion Mortgage Insurance Demonstration Program 
was authorized by the Housing and Community Development Act of 1987. 
The Federal Housing Administration's authority to insure reverse 
mortgages lapsed on October 1 of this year. The legislation which I am 
introducing today would reauthorize this successful program and allow 
it to continue for an additional 5 years, until September 30, 2000. In 
addition, it would broaden the definition to include one- to four-
family homes in which the owner resides and expand insurance authority 
to cover 50,000 reverse mortgages.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 1409

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Home Equity Conversion 
     Mortgage Act of 1995''.

     SEC. 2. EXTENSION OF FHA MORTGAGE INSURANCE PROGRAM FOR HOME 
                   EQUITY CONVERSION MORTGAGES.

       (a) Extension of Program.--The first sentence of section 
     255(g) of the National Housing Act (12 U.S.C. 1715z-20(g)) is 
     amended by striking ``September 30, 1995'' and inserting 
     ``September 30, 2000''.
       (b) Limitation on Number of Mortgages.--The second sentence 
     of section 255(g) of the National Housing Act (12 U.S.C. 
     1715z-20(g)) is amended by striking ``25,000'' and inserting 
     ``50,000''.
       (c) Eligible Mortgages.--Section 255(d)(3) of the National 
     Housing Act (12 U.S.C. 1715z-20(d)(3)) is amended to read as 
     follows:
       ``(3) be secured by a dwelling that is designed principally 
     for a 1- to 4-family residence in which the mortgagor 
     occupies 1 of the units;''.

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