[Congressional Record Volume 143, Number 1 (Tuesday, January 7, 1997)]
[Extensions of Remarks]
[Page E14]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




             HOUSING LOAN GUARANTEE PROGRAM EXTENSION ACTS

                                 ______
                                 

                           HON. DOUG BEREUTER

                              of nebraska

                    in the house of representatives

                        Tuesday, January 7, 1997

  Mr. BEREUTER, Mr. Speaker, today this Member is introducing two bills 
designed to extend important alternatives to traditional Federal 
housing direct lending.
  The first bill, the Rural Multifamily Rental Housing Loan Guarantee 
Extension Act of 1997, permanently authorizes the U.S. Department of 
Agriculture [USDA] administered section 538 program which, as the name 
implies, guarantees repayment of loans to build multifamily rental 
housing in rural communities. The section 538 program was patterned 
after the highly successful section 515 loan guarantee program, which 
is also administered by the USDA. While the section 538 program was 
only fully authorized in the last Congress through the Housing 
Opportunity Program Extension Act of 1996, it has been already been 
well received in rural America and certainly merits permanent 
authorization in the 105th Congress.
  The second bill this Member is introducing today permanently 
authorizes the section 184 loan guarantee program for Indian housing, 
which is administered by the U.S. Department of Housing and Urban 
Development [HUD]. This guarantee program, which I authored and was 
enacted into law in 1992, is designed to bridge the obstacles that have 
prevented private lenders from participating in housing finance on 
Indian trust land. Because of the unique trust status of these 
reservations, private lenders have been reluctant to make loans due to 
the fact that they have no legal recourse should the borrower default. 
Under the section 184 guarantee program, the Federal Government 
eliminates this obstacle by guaranteeing that the lender will be repaid 
should the borrower default. This program has already proven to be 
widely popular in Indian country and provides incentive for private 
lenders to participate in housing one of our Nation's most underserved 
populations.
  Members should remember and be reassured by the fact that the 
disposition of loan guarantee programs provides oversight in that 
Congress must appropriate loan subsidies for all loans to be guaranteed 
under these programs. Thus, the end result of such a permanent 
authorization will be smoother operating programs without interruptions 
resulting from expired authorizations and congressional oversight 
maintained through the annual appropriations process.
  Thank you Mr. Speaker. This Member invites his colleagues to join him 
as a cosponsor of both of these important housing measures.

                          ____________________