John Sarbanes: “S. 2239, the FHA Downpayment Simplification Act, has been cosponsored by 23 Senators, including 15 members of the…”

“S. 2239, the FHA Downpayment Simplification Act, has been cosponsored by 23 Senators, including 15 members of the Committee on Banking, Housing, and Urban Affairs. This legislation takes a program that has been in place since October, 1997, and makes it permanent. The program simplifies the downpayment process for FHA borrowers which, in turn, makes it work better for lenders, realtors, and sellers, as well. The bill was also amended by Senator Reed and others to prevent an increase in the GNMA fee from taking place in 2005. This fee increase is not needed for the safety or soundness of the GNMA program, and it raises the costs of the program for homeowners. Finally, included with this is an amendment that has been worked out by Senators Corzine and Gramm to index the FHA multifamily loan limits. This will help keep the multifamily loan limits viable as costs go up in the future. This legislation is supported by HUD, the Mortgage Bankers Association, the National Association of Realtors, and the National Association of Homebuilders. If the Congress does not act, the authority to use the simplified downpayment calculation will expire at the end of the year, resulting in a more complex process and higher costs for thousands of American homebuyers. I urge that the legislation, S. 2239, as reported out of the Banking Committee be taken up with the amendment and passed.”