[Congressional Record Volume 156, Number 60 (Tuesday, April 27, 2010)]
[House]
[Pages H2907-H2909]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
{time} 1515
RURAL HOUSING PRESERVATION AND STABILIZATION ACT OF 2010
Mr. KANJORSKI. Mr. Speaker, I move to suspend the rules and pass the
bill (H.R. 5017) to ensure the availability of loan guarantees for
rural homeowners, as amended.
The Clerk read the title of the bill.
The text of the bill is as follows:
H.R. 5017
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 ``Rural Housing Preservation
and Stabilization Act of 2010''.
[[Page H2908]]
SEC. 2. LOAN GUARANTEE FEES.
(a) Up-front Fees.--Paragraph (8) of section 502(h) of the
Housing Act of 1949 (42 U.S.C. 1472(h)(8)) is amended to read
as follows:
``(8) Guarantee fees.--With respect to a guaranteed loan
under this subsection, the Secretary may collect from the
lender, at the time of issuance of the guarantee, a fee equal
to not more than 4.0 percent of the principal obligation of
the loan, as determined sufficient by the Secretary to cover
the costs (as such term is defined in section 502 of the
Federal Credit Reform Act of 1990 (2 U.S.C. 661a)) of loan
guarantees under this subsection.''.
(b) Conforming Amendment.--Section 739 of the Agriculture,
Rural Development, Food and Drug Administration, and Related
Agencies Appropriation Act, 2001 (as enacted by Public Law
106-387; 114 Stat. 1549A-34) is hereby repealed
(c) Authorization of Amount of Loan Guarantees.--Section
513 of the Housing Act of 1949 (42 U.S.C. 1483) is amended by
adding at the end the following new subsection:
``(f) Authorization for Loan Guarantees.--The Secretary
may, to the extent approved in appropriation Acts, guarantee
loans under section 502(h) in aggregate amounts not to exceed
$30,000,000,000 for fiscal year 2010.''.
SEC. 3. BUDGETARY EFFECTS.
The budgetary effects of this Act, for the purpose of
complying with the Statutory Pay-As-You-Go-Act of 2010, shall
be determined by reference to the latest statement titled
``Budgetary Effects of PAYGO Legislation'' for this Act,
submitted for printing in the Congressional Record by the
Chairman of the Committee on the Budget of the House of
Representatives, provided that such statement has been
submitted prior to the vote on passage.
The SPEAKER pro tempore. Pursuant to the rule, the gentleman from
Pennsylvania (Mr. Kanjorski) and the gentlewoman from West Virginia
(Mrs. Capito) each will control 20 minutes.
The Chair recognizes the gentleman from Pennsylvania.
General Leave
Mr. KANJORSKI. Mr. Speaker, I ask unanimous consent that all Members
may have 5 legislative days within which to revise and extend their
remarks on this legislation and insert extraneous material thereon.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from Pennsylvania?
There was no objection.
Mr. KANJORSKI. Mr. Speaker, I yield myself such time as I may
consume.
Mr. Speaker, I rise today in support of H.R. 5017, the Rural Housing
Preservation and Stabilization Act. This legislation aims to preserve
the U.S. Department of Agriculture's section 502 Single Family Housing
Guaranteed Loan Program that helps low- and moderate-income rural
residents obtain safe and affordable housing.
Since its inception, this program has helped hundreds of thousands of
families realize the American dream of homeownership. Managed by the
USDA's Rural Housing Service, the program provides a vital source of
mortgage credit in communities of less than 20,000 residents. USDA
currently guarantees rural home loans with the money that it receives
through the appropriations process and the upfront fees it collects on
loan originations.
Historically, Congress has also set, through the annual
appropriations process, the statutory limit on the maximum loan
commitment authority that the Federal Government will guarantee. These
guarantees decrease the exposure of home lenders to default so that
they will underwrite more mortgages for low- and moderate-income
families in rural America.
In 2009, the 115,000 loans made under the program averaged $112,000.
The financial crisis, however, has created unprecedented demand for and
spiked homebuyer interest in the program. As a result, the program has
more than tripled in recent years from guaranteeing about $3 billion in
2006 to guaranteeing more than $10 billion at the end of March 2010.
In March, USDA notified its State directors and participating lenders
in the program that they would have to stop making conditional loan
commitments at the end of April because they had exhausted their
funding and would have to wait until they received additional
appropriations. H.R. 5017 offers a commonsense solution to this problem
by raising the upfront fee that USDA can charge commercial lenders up
to 4 percent and increasing the USDA's loan authority to $30 billion
for the current year. USDA confirms that these amounts would be
sufficient for the program to continue to operate without interruption.
Moreover, by making this program self-sustaining, we would also
reduce discretionary spending by $24 million in the current fiscal
year. So this legislation represents a win for American taxpayers and a
win for America's heartland.
This legislation additionally enjoys broad support and passed out of
the Financial Services Committee by a bipartisan vote last Thursday. In
this regard, I am especially grateful for the work of my colleague, the
gentlewoman from West Virginia (Mrs. Capito), who has worked closely
with me on these matters. Her suggestions have helped make a good bill
even better.
Additionally, many groups have called upon Congress to act quickly to
fix this problem, including the National Association of Realtors, the
Mortgage Bankers Association, and the American Bankers Association. We
should heed their advice and pass this bill.
In sum, Mr. Speaker, to preserve the dream of homeownership in
America's heartland, I urge all my colleagues to vote ``yes'' on H.R.
5017.
I reserve the balance of my time.
Mrs. CAPITO. Mr. Speaker, I would like to thank my colleague, Mr.
Kanjorski, for his good, solid work on this bill. We have worked well
together on H.R. 5017, and I think we see the results of that work
together here today on the floor.
This legislation extends the USDA 502 loan guarantee program. This
program is a very important homeownership tool for many rural
Americans, many of whom live in my State of West Virginia, providing a
loan guarantee on privately issued loans. The 502 program has a very
low default rate.
Over the last few years, demand for the program has increased, and
consequently loan commitment authority for the 502 program will be
exhausted. Without swift action, borrowers who rely on this program
will run out of options for affordable home loans.
Last week, I offered an amendment during the markup of H.R. 5017 in
the Financial Services Committee that provides the 502 program with
additional loan commitment authority and makes an important improvement
to the program. In order to make the program self-sufficient, we are
raising the guaranteed fee up to 4 percent, granting the Secretary the
authority to choose the appropriate level. This ensures that the
program will no longer be reliant on taxpayer funds to build capital
reserves, a welcome part of the 502 program.
Although I am committed to continuing to work with my colleagues on
potential long-term modifications to the 502 program that serve the
best interests of the homeowners and the taxpayers, I believe it is
important that the language increasing the loan commitment authority to
$30 billion be limited to the current fiscal year and not beyond that
time period. We must be aware of the impact on the private market and
ensure that private entities are able to regain appropriate market
share.
Mr. Speaker, with these changes, we strike a balance of extending the
program through the rest of the year. I, and I'm sure many of my
colleagues here, have heard from numerous Realtors, lenders and
potential homebuyers about the situation that the 502 program has found
itself in. Since its inception, the 502 program has helped hundreds of
thousands of families with low to moderate incomes realize
homeownership. Over the past several weeks, as I said, many
constituents have contacted me stressing just how important this
program is as they are on their path towards homeownership and wish to
see its continued funding.
Again, I would like to thank Mr. Kanjorski for working with me on
this legislation.
I reserve the balance of my time.
Mr. KANJORSKI. Mr. Speaker, I yield 2 minutes to the gentleman from
Connecticut (Mr. Courtney).
Mr. COURTNEY. Mr. Speaker, last Friday, the U.S. Department of
Commerce released figures for March for the sale of single family
homes. It increased by 27 percent, the biggest increase since 1963.
We are finally starting to see real signs of recovery in the housing
market, but it didn't happen by itself entirely. Prices have certainly
gone
[[Page H2909]]
down, there are good rates available out there, but programs like the
one Congressman Kanjorski's legislation will protect and nurture have
been a huge reason why we've seen the growth in numbers that the U.S.
Department of Commerce reported last week.
The 502 program in eastern Connecticut has been a lifeline throughout
2009 and early 2010 where, again, the spike in numbers that Mr.
Kanjorski described has been a reality and has allowed, again, the
market to thrive, but also to provide people an avenue to obtain
financing that otherwise they never would have been able to get in the
regular market.
As was said by the Congresswoman from West Virginia, lenders are
holding their breath, homeowners are holding their breath, and the
first-time homebuyer tax credit is about to expire in a few days.
Passing this legislation which will provide an avenue to protect this
program will continue the upward momentum that we are finally starting
to see in the housing market.
Again, I congratulate Mr. Kanjorski for his creative solution to this
problem, which will not cost the taxpayers additional funds, but will
keep, again, a growing real estate market moving in the right
direction.
Mrs. CAPITO. Mr. Speaker, I would just, again, reiterate my support
for this bill. I think it's timely. It's something that we want to do
in an expeditious and responsible manner, and I believe that this bill
addresses those concerns.
Ms. WATERS. Mr. Speaker, I rise in strong support of H.R. 5017, the
``Rural Housing Preservation and Stabilization Act of 2010.''
This bill would preserve the U.S. Department of Agriculture's Rural
Housing Service (RHS) Section 502 Single Family Direct Homeownership
Loans Program, which is set to expire at the end of this month.
Section 502 is USDA's main housing loan program and is designed to
help low-income individuals purchase, build, repair, or renovate homes
in rural areas.
Currently, Section 502 is the only federal program targeting safe and
affordable homeownership opportunities to low- and very low-income
rural households. The annual average income of a Section 502 direct
borrower is 55 percent of area median income, or $18,500 a year.
Since its inception, Section 502 has provided loans to approximately
2.5 million families at an extremely low cost to the federal
government. Unfortunately, the amount appropriated for rural housing
programs has been insufficient to meet the demand. The current backlog
for Section 502 direct loans includes 27,000 rural households, totaling
$2.9 billion in loan applications.
H.R. 5017, will preserve the Section 502 program and establish a
self-sustaining program at no cost to taxpayers. I believe Section 502
is vital for our rural communities throughout the nation and this bill
is absolutely necessary to help preserve a critical program at no cost
to taxpayers.
I urge my colleagues to vote for this important bill.
Mrs. CAPITO. Mr. Speaker, I yield back the balance of my time.
Mr. KANJORSKI. Mr. Speaker, I yield back the balance of my time.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from Pennsylvania (Mr. Kanjorski) that the House suspend the
rules and pass the bill, H.R. 5017, as amended.
The question was taken.
The SPEAKER pro tempore. In the opinion of the Chair, two-thirds
being in the affirmative, the ayes have it.
Mr. KANJORSKI. Mr. Speaker, on that I demand the yeas and nays.
The yeas and nays were ordered.
The SPEAKER pro tempore. Pursuant to clause 8 of rule XX and the
Chair's prior announcement, further proceedings on this motion will be
postponed.
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