G-fees shouldn’t be used to fund infrastructure bill: housing groups

One source of funds Congress should not tap to fund the Bipartisan Infrastructure Framework are the government-sponsored enterprises’ mortgage guarantee fees, a coalition of banking and real estate trade groups declared.

The initial list of potential funding sources for the $579 billion plan did not include g-fees. However, as items like increased tax revenue are eliminated, groups who signed the letter worry congressional negotiators could turn to them as they look for other resources.

The letter, which includes the Mortgage Bankers Association, the American Bankers Association and the National Association of Realtors as signatories, refers to past congressional attempts, including a successful one in 2011, to use g-fees to fill budget holes.

"We have indicated on numerous occasions that we were deeply troubled when g-fees were raised by 10 basis points for 10 years to fund a two-month period of payroll tax relief in 2011," said the letter addressed to Sens. Kyrsten Sinema, D-Ariz., and Rob Portman, R-Ohio. "That increase harmed homebuyers by raising the cost of homeownership in all parts of the country — and continues to do so during the provisions decade-long lifespan, which expires in September."

After that mandatory increase came into effect, several attempts were made to extend its sunset, including to fund a further payroll tax holiday, as well as to pay for a highway infrastructure bill.

Subsequently, the Senate tried several times to limit the ability to raise g-fees, including a 2013 resolution that would have required a supermajority of 60 votes to approve such a move. Several bills were introduced, most recently in 2019, that would prohibit g-fees being used as a federal budget gap filler, although none have been enacted.

"We are united … in our belief that using g-fees as a funding mechanism is wholly inappropriate and shifts the burden of paying for infrastructure-related initiatives to the country's current and future homeowners. The benefits of affordable homeownership accrue to families, communities, and our national economy; we simply cannot allow these benefits to be jeopardized by efforts to raise g-fees unnecessarily," the letter concludes.