[Congressional Record Volume 167, Number 67 (Monday, April 19, 2021)]
[House]
[Pages H1909-H1910]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 HOUSING FINANCIAL LITERACY ACT OF 2021

  Ms. PRESSLEY. Madam Speaker, I move to suspend the rules and pass the 
bill (H.R. 1395) to require the Secretary of Housing and Urban 
Development to discount FHA single-family mortgage insurance premium 
payments for first-time homebuyers who complete a financial literacy 
housing counseling program.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 1395

       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 ``Housing Financial Literacy 
     Act of 2021''.

     SEC. 2. DISCOUNT ON MORTGAGE INSURANCE PREMIUM PAYMENTS FOR 
                   FIRST-TIME HOMEBUYERS WHO COMPLETE FINANCIAL 
                   LITERACY HOUSING COUNSELING PROGRAMS.

       The second sentence of subparagraph (A) of section 
     203(c)(2) of the National Housing Act (12 U.S.C. 
     1709(c)(2)(A)) is amended--
       (1) by inserting before the comma the following: ``and such 
     program is completed before the mortgagor has signed an 
     application for a mortgage to be insured under this title or 
     a sales agreement''; and
       (2) by striking ``not exceed 2.75 percent of the amount of 
     the original insured principal obligation of the mortgage'' 
     and inserting ``be 25 basis points lower than the premium 
     payment amount established by the Secretary under the first 
     sentence of this subparagraph''.

  The SPEAKER pro tempore. Pursuant to the rule, the gentlewoman from 
Massachusetts (Ms. Pressley) and the gentleman from North Carolina (Mr. 
McHenry) each will control 20 minutes.
  The Chair recognizes the gentlewoman from Massachusetts.


                             General Leave

  Ms. PRESSLEY. Madam Speaker, I ask unanimous consent that all Members 
may have 5 legislative days in which to revise and extend their remarks 
on this legislation and to insert extraneous material thereon.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentlewoman from Massachusetts?
  There was no objection.
  Ms. PRESSLEY. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I rise to support H.R. 1395, the Housing Financial 
Literacy Act, a bipartisan bill authored by

[[Page H1910]]

Representative Beatty who is the chairwoman of the Subcommittee on 
Diversity and Inclusion. The bill is also cosponsored by Representative 
Stivers.
  This bill would incentivize prospective home buyers to undergo 
housing counseling by offering a discount on FHA-backed mortgages for 
doing so. Research has consistently demonstrated that loans made to 
borrowers who have received pre-purchase counseling perform better than 
loans made to comparable borrowers who did not receive pre-purchase 
counseling on their mortgage.
  When borrowers are able to stay current on their mortgage payments, 
lenders save money too. A 2013 study by Freddie Mac found that when 90-
day delinquencies were lowered by 29 percent, lenders saved an average 
of $1,000 per loan. So this bill would not only benefit consumers 
during an environment of historically low mortgage rates, it would also 
help further improve the financial health of the FHA.
  Madam Speaker, I thank Representative Beatty for her leadership on 
this commonsense, data-driven bill. I urge my colleagues to vote 
``yes'' on H.R. 1395, and I reserve the balance of my time.
  Mr. McHENRY. Madam Speaker, I yield myself such time as I may 
consume.
  Madam Speaker, I want to thank the gentlewoman from Ohio (Mrs. 
Beatty) for all of her hard work on H.R. 1395, the Housing Financial 
Literacy Act of 2021.
  The Federal Housing Administration, FHA, currently provides 
government-backed mortgage insurance to more than $1.3 trillion in 
loans. FHA insurance allows a wide array of borrowers to qualify for 
mortgages. This includes many low- and moderate-income families who 
might not otherwise have access to credit through traditional 
underwriting.
  In fiscal year 2020, the FHA insured over 800,000 forward mortgage 
purchase loans, with more than 83 percent going to first-time home 
buyers. Given the large population of first-time home buyers using FHA, 
it makes sense to encourage those individuals to seek out ways to 
strengthen their financial knowledge and better prepare them for the 
challenges of homeownership.
  Right now, current law states that FHA has the ability to provide 
first-time homeowners with a discount on their FHA upfront premiums. 
However, the homeowner must complete an approved homeownership 
financial counseling course.
  Yet, the statute is drafted in such a way that the provision only 
applies in particular circumstances. This includes when FHA upfront 
premiums exceed 2.75 percent. Since FHA upfront premiums are currently 
set at 1.75 percent, the rate has not been exceeded in a decade. Thus, 
FHA does not currently provide an upfront premium discount to first-
time home buyers who complete a financial counseling course.
  H.R. 1395 would amend current law to require FHA to provide a one-
quarter percent upfront premium discount, from the prevailing rate, in 
order to help those first-time home buyers get financial literacy and 
then get the discount. This equates to about $625 of savings off the 
current premium structure on a $250,000 mortgage. This is not an 
insignificant amount.
  Given the nature of this, I think it is great to have a financial 
benefit for people understanding financial consequences. I think there 
are many other areas in our government that would benefit from this 
type of thinking.
  The hope is that by making such a discount mandatory, more first-time 
home buyers will seek out financial literacy counseling which, in turn, 
will produce better outcomes for a traditionally at-risk group of home 
buyers.
  The bottom line is that FHA is a valuable tool to help expand the 
universe of mortgage credit in our housing system. We ought to be doing 
all that we can to ensure that we are using our limited public 
resources to encourage all borrowers to be well-prepared for the 
commitments of homeownership through financial counseling or through 
other effective means of creating more stable and reliable borrowers.
  So I think this is a very good bill thoughtfully done by Mrs. Beatty, 
and it is bipartisan, coming out of committee last Congress.
  Madam Speaker, I have no more speakers. I urge its adoption, I ask my 
colleagues to vote ``yes,'' and I yield back the balance of my time.
  Ms. PRESSLEY. Madam Speaker, I yield myself the remainder of my time.
  Madam Speaker, I thank the gentlewoman from Ohio for pushing this 
bill forward.
  This bill incentivizes financial literacy that will help avoid 
delinquencies and lower the upfront cost of homeownership for so many.
  Madam Speaker, I urge all of my colleagues to join me in supporting 
this important piece of legislation, and I yield back the balance of my 
time.
  Ms. JOHNSON of Texas. Madam Speaker, for many generations, the idea 
of the American Dream has been homeownership. Yet the goal for many 
Americans of owning the place they call home is more distant than ever 
before. It doesn't just require savings and a good credit score 
anymore--but also a strong financial plan to ensure that you can hold 
on to it for the years to follow.
  That is why I am proud today to support H.R. 1395, the Housing 
Financial Literacy Act of 2021. This bill, introduced by my good friend 
and chair of the Congressional Black Caucus, Congresswoman Joyce Beatty 
of Ohio, provides a financial incentive for first-time homebuyers who 
choose to take a financial literacy course by providing a discount on 
mortgage insurance through the Federal Housing Administration (FHA).
  This bill would greatly benefit first-time homebuyers by not just 
saving them money during the homebuying process, but also providing 
them the tools needed to build a strong financial plan. I urge all my 
colleagues to support this legislation and hope the Senate will swiftly 
pass this bill so that first-time homebuyers are able to benefit from 
this opportunity as soon as possible.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentlewoman from Massachusetts (Ms. Pressley) that the House suspend 
the rules and pass the bill, H.R. 1395.
  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. BIGGS. Madam Speaker, on that I demand the yeas and nays.
  The SPEAKER pro tempore. Pursuant to section 3(s) of House Resolution 
8, the yeas and nays are ordered.
  Pursuant to clause 8 of rule XX, further proceedings on this motion 
are postponed.

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