[Congressional Record (Bound Edition), Volume 156 (2010), Part 5]
[House]
[Pages 6406-6407]
[From the U.S. 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''.

     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     106-387; 114 Stat. 1549A-34) is hereby repealed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

[[Page 6407]]

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 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.

                          ____________________