Issue memo, May 12, 1998

с ISSUE MEMO May 12, 1998 To: RLE, SK, RC Issue: The American Homeownership Act. Dear Bob: Chairman Lazio is planning to introduce the American Homeownership Act on Thursday, May 14. The intent of the legislation is to create more opportunities for low and moderate income families to achieve homeownership. The provisions in this bill should be a bipartisan and noncontroversial. Furthermore, we have been told this will be the likely vehicle to attach the mortgage broker moratorium. We have been asked to be an original cosponsor of this legislation. While we can support most of the provisions in this bill, homeownership is being achieved by more government intervention, instead of less. The following is a section-by-section analysis of the bill: Title 1: Removal of Barriers to Affordable Housing ► Requires all proposed federal regulations to include a housing impact analysis to determine the impact of the regulation on affordable housing. ► Authorizes $15 million for grants to state and local governments for regulatory barrier removal strategy. Title 2: Homeownership Through FHA Mortgage Insurance ► Provides Secretary with authority to increase the number of adjustable rate mortgages (ARMs) by an amount not to exceed 40% of the prior year’s number of mortgages. ► Requires a home inspection to be purchased using FHA-insured financing. ► Provides Secretary with discretion to treat any proximate counties or contiguous areas as a single area for purposes of determining the FHA loan limit. Title 3: Assistance for Self-Help Housing Providers ► Provides an extension of funds granted to Habitat for Humanity (through FY99). Title 4: Section 8 Homeownership Option ► Provides flexibility within the Section 8 program for PHAs to create homeownership programs for families receiving tenet-based assistance. Continued