Rural Housing Preservation and Stabilization Act of 2010

Mr. Speaker, I move to suspend the rules and pass the bill (H.R. 5017) to ensure the availability of loan guarantees for rural homeowners, as amended.

Mr. Speaker, I ask unanimous consent that all Members may have 5 legislative days within which to revise and extend their remarks on this legislation and insert extraneous material thereon.

Mr. Speaker, I yield myself such time as I may consume.

Mr. Speaker, I rise today in support of H.R. 5017, the Rural Housing Preservation and Stabilization Act. This legislation aims to preserve the U.S. Department of Agriculture's section 502 Single Family Housing Guaranteed Loan Program that helps low- and moderate-income rural residents obtain safe and affordable housing.

Since its inception, this program has helped hundreds of thousands of families realize the American dream of homeownership. Managed by the USDA's Rural Housing Service, the program provides a vital source of mortgage credit in communities of less than 20,000 residents. USDA currently guarantees rural home loans with the money that it receives through the appropriations process and the upfront fees it collects on loan originations.

Historically, Congress has also set, through the annual appropriations process, the statutory limit on the maximum loan commitment authority that the Federal Government will guarantee. These guarantees decrease the exposure of home lenders to default so that they will underwrite more mortgages for low- and moderate-income families in rural America.

In 2009, the 115,000 loans made under the program averaged $112,000. The financial crisis, however, has created unprecedented demand for and spiked homebuyer interest in the program. As a result, the program has more than tripled in recent years from guaranteeing about $3 billion in 2006 to guaranteeing more than $10 billion at the end of March 2010.

In March, USDA notified its State directors and participating lenders in the program that they would have to stop making conditional loan commitments at the end of April because they had exhausted their funding and would have to wait until they received additional appropriations. H.R. 5017 offers a commonsense solution to this problem by raising the upfront fee that USDA can charge commercial lenders up to 4 percent and increasing the USDA's loan authority to $30 billion for the current year. USDA confirms that these amounts would be sufficient for the program to continue to operate without interruption.

Moreover, by making this program self-sustaining, we would also reduce discretionary spending by $24 million in the current fiscal year. So this legislation represents a win for American taxpayers and a win for America's heartland.

This legislation additionally enjoys broad support and passed out of the Financial Services Committee by a bipartisan vote last Thursday. In this regard, I am especially grateful for the work of my colleague, the gentlewoman from West Virginia (Mrs. Capito), who has worked closely with me on these matters. Her suggestions have helped make a good bill even better.

Additionally, many groups have called upon Congress to act quickly to fix this problem, including the National Association of Realtors, the Mortgage Bankers Association, and the American Bankers Association. We should heed their advice and pass this bill.

In sum, Mr. Speaker, to preserve the dream of homeownership in America's heartland, I urge all my colleagues to vote ``yes'' on H.R. 5017.

I reserve the balance of my time.

Mr. Speaker, I yield 2 minutes to the gentleman from Connecticut (Mr. Courtney).

Mr. Speaker, I yield back the balance of my time.

Mr. Speaker, on that I demand the yeas and nays.

Mr. Speaker, I would like to thank my colleague, Mr. Kanjorski, for his good, solid work on this bill. We have worked well together on H.R. 5017, and I think we see the results of that work together here today on the floor.

This legislation extends the USDA 502 loan guarantee program. This program is a very important homeownership tool for many rural Americans, many of whom live in my State of West Virginia, providing a loan guarantee on privately issued loans. The 502 program has a very low default rate.

Over the last few years, demand for the program has increased, and consequently loan commitment authority for the 502 program will be exhausted. Without swift action, borrowers who rely on this program will run out of options for affordable home loans.

Last week, I offered an amendment during the markup of H.R. 5017 in the Financial Services Committee that provides the 502 program with additional loan commitment authority and makes an important improvement to the program. In order to make the program self-sufficient, we are raising the guaranteed fee up to 4 percent, granting the Secretary the authority to choose the appropriate level. This ensures that the program will no longer be reliant on taxpayer funds to build capital reserves, a welcome part of the 502 program.

Although I am committed to continuing to work with my colleagues on potential long-term modifications to the 502 program that serve the best interests of the homeowners and the taxpayers, I believe it is important that the language increasing the loan commitment authority to $30 billion be limited to the current fiscal year and not beyond that time period. We must be aware of the impact on the private market and ensure that private entities are able to regain appropriate market share.

Mr. Speaker, with these changes, we strike a balance of extending the program through the rest of the year. I, and I'm sure many of my colleagues here, have heard from numerous Realtors, lenders and potential homebuyers about the situation that the 502 program has found itself in. Since its inception, the 502 program has helped hundreds of thousands of families with low to moderate incomes realize homeownership. Over the past several weeks, as I said, many constituents have contacted me stressing just how important this program is as they are on their path towards homeownership and wish to see its continued funding.

Again, I would like to thank Mr. Kanjorski for working with me on this legislation.

I reserve the balance of my time.

Mr. Speaker, I would just, again, reiterate my support for this bill. I think it's timely. It's something that we want to do in an expeditious and responsible manner, and I believe that this bill addresses those concerns.

Mr. Speaker, I yield back the balance of my time.

Madam Speaker, unfortunately, I missed the following recorded votes on the House floor the legislative week of Monday, April 26, 2010.

For Monday, April 26, 2010, had I been present I would have voted ``aye'' on Rollcall vote No. 221 (on motion to suspend the rules and agree to H.R. 4543), ``aye'' on Rollcall vote No. 222 (on motion to suspend the rules and agree to H. Res. 1103), ``aye'' on Rollcall vote No. 223 (on motion to suspend the rules and agree to H.R. 4861).

For Tuesday, April 27, 2010, had I been present I would have voted ``aye'' on Rollcall vote No. 224 (on motion to suspend the rules and agree to H. Res. 1131), ``no'' on Rollcall vote No. 225 (on motion to suspend the rules and agree to H.R. 5017), ``aye'' on Rollcall vote No. 226 (on motion to suspend the rules and agree to H.R. 5146).

For Wednesday, April 28, 2010, had I been present I would have voted ``aye'' on Rollcall vote No. 227 (on agreeing to the Hall (NY) amendment to H.R. 5013), ``aye'' on Rollcall vote No. 228 (on agreeing to the Connolly amendment to H.R. 5013), ``aye'' on Rollcall vote No. 229 (on motion to recommit H.R. 5013 with instructions), ``aye'' on Rollcall vote No. 230 (on passage of H.R. 5013).

For Thursday, April 29, 2010, had I been present I would have voted ``no'' on Rollcall vote No. 231 (on ordering the previous question to H. Res. 1305), ``no'' on Rollcall vote No. 232 (on agreeing to H. Res. 1305, providing for consideration of H.R. 2499), ``no'' on Rollcall vote No. 233 (on motion to table the motion to reconsider the vote on H. Res. 1305), ``aye'' on Rollcall vote No. 234 (on agreeing to the Foxx amendment to H.R. 2499), ``aye'' on Rollcall vote No. 235 (on agreeing to the Gutierrez amendment to H.R. 2499), ``no'' on Rollcall vote No. 236 (on agreeing to the Gutierrez amendment to H.R. 2499), ``no'' on Rollcall vote No. 237 (on agreeing to the Burton (IN) amendment to H.R. 2499), ``no'' on Rollcall vote No. 238 (on agreeing to the Velazquez amendment to H.R. 2499), ``aye'' on Rollcall vote No. 239 (on agreeing to the Velazquez amendment to H.R. 2499), ``aye'' on Rollcall vote No. 240 (on agreeing to the Velazquez amendment to H.R. 2499), ``aye'' on Rollcall vote No. 241 (on motion to recommit H.R. 2499 with instructions), ``no'' on Rollcall vote No. 242 (on passage of

Mr. Speaker, last Friday, the U.S. Department of Commerce released figures for March for the sale of single family homes. It increased by 27 percent, the biggest increase since 1963.

We are finally starting to see real signs of recovery in the housing market, but it didn't happen by itself entirely. Prices have certainly gone

down, there are good rates available out there, but programs like the one Congressman Kanjorski's legislation will protect and nurture have been a huge reason why we've seen the growth in numbers that the U.S. Department of Commerce reported last week.

The 502 program in eastern Connecticut has been a lifeline throughout 2009 and early 2010 where, again, the spike in numbers that Mr. Kanjorski described has been a reality and has allowed, again, the market to thrive, but also to provide people an avenue to obtain financing that otherwise they never would have been able to get in the regular market.

As was said by the Congresswoman from West Virginia, lenders are holding their breath, homeowners are holding their breath, and the first-time homebuyer tax credit is about to expire in a few days. Passing this legislation which will provide an avenue to protect this program will continue the upward momentum that we are finally starting to see in the housing market.

Again, I congratulate Mr. Kanjorski for his creative solution to this problem, which will not cost the taxpayers additional funds, but will keep, again, a growing real estate market moving in the right direction.

Mr. Speaker, I rise in strong support of H.R. 5017, the ``Rural Housing Preservation and Stabilization Act of 2010.''

This bill would preserve the U.S. Department of Agriculture's Rural Housing Service (RHS) Section 502 Single Family Direct Homeownership Loans Program, which is set to expire at the end of this month.

Section 502 is USDA's main housing loan program and is designed to help low-income individuals purchase, build, repair, or renovate homes in rural areas.

Currently, Section 502 is the only federal program targeting safe and affordable homeownership opportunities to low- and very low-income rural households. The annual average income of a Section 502 direct borrower is 55 percent of area median income, or $18,500 a year.

Since its inception, Section 502 has provided loans to approximately 2.5 million families at an extremely low cost to the federal government. Unfortunately, the amount appropriated for rural housing programs has been insufficient to meet the demand. The current backlog for Section 502 direct loans includes 27,000 rural households, totaling $2.9 billion in loan applications.

H.R. 5017, will preserve the Section 502 program and establish a self-sustaining program at no cost to taxpayers. I believe Section 502 is vital for our rural communities throughout the nation and this bill is absolutely necessary to help preserve a critical program at no cost to taxpayers.

I urge my colleagues to vote for this important bill.