Improving FHA Support for Small Dollar Mortgages Act of 2020

Improving FHA Support for Small Dollar Mortgages Act of 2020

This bill directs the Department of Housing and Urban Development (HUD) to report on barriers to making Federal Housing Administration (FHA) single-family mortgage insurance available for mortgages under $70,000. Specifically, HUD must report on policies, practices, and products used by the FHA and actions that will be taken to remove such barriers.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5931 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 5931

To require a review of the effects of FHA mortgage insurance policies, 
practices, and products on small-dollar mortgage lending, and for other 
                               purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           February 21, 2020

 Mr. Clay (for himself and Mr. Stivers) introduced the following bill; 
       which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
To require a review of the effects of FHA mortgage insurance policies, 
practices, and products on small-dollar mortgage lending, and for other 
                               purposes.

    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 ``Improving FHA Support for Small 
Dollar Mortgages Act of 2020''.

SEC. 2. REVIEW OF FHA SMALL-DOLLAR MORTGAGE PRACTICES.

    (a) Congressional Findings.--The Congress finds that--
            (1) affordable homeownership opportunities are being 
        stymied due to the lack of financing available for home 
        purchases under $70,000;
            (2) according to the Urban Institute, small-dollar mortgage 
        loan applications in 2017 were denied by lenders at double the 
        rate of denial for large mortgage loans, and these denial rates 
        were not related to applicants' creditworthiness;
            (3) according to data compiled by Attom Data solutions, 
        small-dollar mortgage originations have decreased 38 percent 
        since 2009, while there has been a 65-percent increase in 
        origination of mortgages for more than $150,000;
            (4) although the FHA's mission is to serve creditworthy 
        borrowers who are underserved, according to the Urban Institute 
        the FHA serves 24 percent of the overall market, but only 19 
        percent of the small-dollar mortgage market; and
            (5) the FHA should play a greater role in supporting 
        affordable homeownership opportunities by reducing barriers to 
        small-dollar lending, as is consistent with the Department of 
        Housing and Urban Development's mission, including meeting the 
        housing needs of borrowers the program is designed to serve and 
        protecting the solvency of the Mutual Mortgage Insurance Fund.
    (b) Review.--The Secretary of Housing and Urban Development shall 
conduct a review of its FHA single-family mortgage insurance policies, 
practices, and products to identify any barriers or impediments to 
supporting, facilitating, and making available mortgage insurance for 
mortgages having an original principal obligation of $70,000 or less. 
Not later than the expiration of the 12-month period beginning on the 
date of the enactment of this Act, the Secretary shall submit a report 
to the Congress describing the findings of such review and the actions 
that the Secretary will take to remove such barriers and impediments to 
providing mortgage insurance for such mortgages without adversely 
affecting the solvency of the Mutual Mortgage Insurance Fund.
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