HUD to Reintroduce Home Mortgage Plan
WASHINGTON — The Department of Housing and Urban Development said it will reintroduce a proposal in Congress that would make it possible for more people to qualify for home mortgages.
The initiative would allow home buyers with mortgages of as much as $227,150 to qualify for Federal Housing Administration insurance. The current maximum mortgage that qualifies for FHA insurance is $170,362.
The proposal was brought to Congress last year but never went to a vote.
“Last year, there was not a concerted effort to push the proposal, but there will be this year,†HUD Secretary Andrew Cuomo said.
The FHA doesn’t make loans directly. Instead, it ensures that loans made by private lenders to home buyers will be paid back, making loan qualification easier for people who otherwise might be denied.
Any change to the FHA charter requires passage of new legislation. Cuomo said the proposal will be included in President Clinton’s 1998 budget, to be delivered to Congress next month.
FHA-insured loans make buying a home easier by requiring only a 3% down payment, lower than the market average; by having more flexible requirements for credit ratings; and by allowing the borrower to carry more debt than permitted by most private mortgage insurers.
The increased maximum on mortgages insured by the FHA would enable about 3 million more families to qualify for mortgages over the next five years, Cuomo said.
The Mortgage Bankers Assn. of America said its mortgage applications index soared 40.6% last week.
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