House-Passed Supplemental Includes NCSHA-Supported Provisions on Rural Home Loan Program and FHA Multifamily Loan Authority

On July 1, the House amended and passed the Senate-passed Supplemental Appropriations Act of 2010, H.R. 4899. Because the House made changes to the Senate-passed version, the Senate will have to consider the new version after it returns from its July 5-9 recess.

The House-passed version retains the Senate bill’s NCSHA-supported provision allowing the Section 502 Single-Family Rural Housing Guaranteed Loan Program to continue this year by increasing the annual commitment authority for the program by as much as necessary to meet FY 2010 loan demand. The program ran out of funds in May due to high demand.

H.R. 4899 allows for an increase of the current 2 percent upfront fee to up to 3.5 percent and an annual fee of up to 0.5 percent to make the program self-funding. USDA has said that they would need to raise the upfront fee to approximately 3.5 percent to make the program self-sustaining and does not expect to implement an annual fee until the next fiscal year.

The bill would also allow the Secretary of Agriculture to waive fees for very low- and low-income borrowers, not to exceed $697 million in loan guarantees. NCSHA reported on this provision in a June 2 blog.

In an adopted amendment to the bill, the House added a provision for which NCSHA has advocated that will increase the Federal Housing Administration’s (FHA) multifamily loan guarantee commitment authority from $15 billion to $20 billion.

Without the increase, FHA expects its authority to be exhausted by August or September. In a letter sent to House Appropriations Transportation-HUD Subcommittee Chairman John Olver (D-MA), FHA Commissioner David Stevens stated that FHA multifamily, hospital, and healthcare loan guarantee programs that are insured under the General Insurance/Special Risk Insurance (GI/SRI) Fund have been experiencing higher than expected demand due to continuing disruptions in the bond and credit markets.

Also included in the House-passed bill is the House Budget Enforcement Resolution for FY 2011. The Enforcement Resolution takes the place of a Budget Resolution or Deeming Resolution for consideration of FY 2011 appropriations. It sets the House top-line discretionary budget authority for FY 2011 at $1.12 trillion—$3 billion below the discretionary spending cap set by the Senate Budget Committee-passed Budget Resolution. The Senate has not yet approved a discretionary spending cap.