We've been waiting for this.
The U.S. House of Representatives passed H.R.1852, the Expanding American Homeownership Act of 2007 last week by a vote of 348 to 72. The bill will reform the FHA mortgage insurance program in an effort to allow it to compete in today’s housing market. Included in the bill is an amendment to increase the FHA loan limit to 125% of an area’s median home price capped at $729,750. H.R. 1852 was introduced by California Congresswoman Maxine Waters and the amendment to increase the loan limit was sponsored by Congressmen Gary Miller and Dennis Cardoza of California, along with Barney Frank of Massachusetts.
Other changes to the FHA program included in the bill are:
Extending the mortgage term length from 35 to 40 years, allowing FHA to insure zero-down mortgages in certain circumstances, allowing FHA to use risk-based pricing when setting their mortgage insurance premiums, increasing mortgage counseling for homebuyers to help them utilize the program, better educate them and help avoid foreclosure, and increasing the number of reverse mortgages lenders may do.
Our state and national Realtor groups, C.A.R. and NAR, have worked to pass FHA reform for a long time, and will now focus on getting this vital piece of legislation through the Senate.
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