The U.S. Department of Housing and Urban Development has asked Congress to
let the Federal Housing Administration insure up to $130 billion in home
mortgages this year and another $130 billion next year.
FHA's loan volume cap for the current fiscal year is $110 billion. The
Department of Housing and Urban Development's fiscal 2000 budget request --
currently under serious fire in Congress -- had sought to increase the cap to
$120 billion next year.
Appearing before a subcommittee of the House Appropriations Committee today,
Housing Secretary Andrew Cuomo said both this year's and next year's volume
caps are too low to meet homebuyer demand, and asked that the caps be raised to
$130 billion in each year.
Under the request, FHA - which is part of HUD -- could insure a total of about
400,000 additional mortgages this year and next year above the number it would
otherwise insure if the FHA volume cap remained at its current level.
"American homebuyers recognize a good deal when they see it, and they know FHA
is a good deal," Cuomo said. "As a result, more and more families are turning
to FHA to make their dream of homeownership a reality. They know that FHA is
back in business, and they know this is good news for hard-working families
struggling to become homeowners."
"Allowing FHA to insure more loans won't cost taxpayers a dime, and it will
help families across our nation build better lives as homeowners," Cuomo said.
The FHA Insurance Fund is supported by premiums paid by borrowers who receive
FHA insurance, rather than by taxes.
Cuomo also asked the subcommittee to increase the volume cap for Ginnie Mae,
another agency within HUD, which acts as the secondary market for all FHA and
VA loans.
He requested that Ginnie Mae's volume cap be raised from the current $150
billion to $200 billion this year. He asked that Ginnie Mae's request for a
$200 billion cap next year be raised to $250 billion. The increased volume of
FHA and VA loans creates a need for Ginnie Mae to have a higher cap on the
amounts of loans it can purchase, Cuomo said.
Published: March 12, 1999
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