Housing finance reform will be a priority issue for the Senate Banking, Housing, and Urban Affairs Committee in the fall. Committee Chairman Tim Johnson (D-SC) and Ranking Member Mike Crapo (R-ID) are working together to craft a consensus bill.
The committee will hold a series of hearings that begin on September 12 with a hearing entitled, “Essential Elements of Housing Finance Reform." Witnesses will be Julia Gordon, director of housing finance and policy of the Center for American Progress, and Jerome T. Lienhard, II, CEO of SunTrust Mortgage, Inc. The hearing will be at 10 am in Dirksen Senate Office Building 538.
This continued analysis that the Chairman and Ranking Member have decided to undertake indicates that they do not intend to take up S. 1217, the GSE reform bill introduced by Senators Bob Corker (R-TN) and Mark Warner (D-VA), as the basis for housing finance reform. However, many elements of S. 1217 are expected to inform the legislation that the committee leadership will develop.
S. 1217, which has eight additional bipartisan cosponsors to date, includes a form of the National Housing Trust Fund, but the bill language must be improved. As currently drafted, the rental housing functions of the National Housing Trust Fund are reduced from the current authorized levels. NLIHC wants the bill language to be improved to:
- Preserve the Housing Trust Fund as a HUD program that provides grants to states for the core purpose of expanding rental housing that is affordable for extremely low income families (30% AMI or less);
- Require that fees to be levied against mortgages/mortgage backed securities are the maximum amount possible and are to be used to maximize funding to the Housing Trust Fund for the purpose stated above; and
- Require that any provisions for rental housing in any other sections of the bill should be limited to rental housing that is targeted no higher than very low income (50% AMI or less).
On the House side, the Committee on Financial Services approved along partisan lines H.R. 2767, the Protecting American Taxpayers and Homeowners (PATH) Act. H.R. 2767 would privatize the current housing finance system and eliminate the National Housing Trust Fund as part of that process (see Memo, 7/26). It is unclear when and if H.R. 2767 will go the House Floor for a vote. Notably, House Majority Leader Eric Cantor (R-VA) did not include GSE reform as an issue on the fall agenda for the House that he sent to the Republican Caucus on September 6. NLIHC will continue to strenuously oppose any efforts to deauthorize the National Housing Trust Fund.