House Panel: OFHEO Si, Zero-Down No

A House Appropriations subcommittee has approved a fiscal year 2006 appropriations bill for the Department of Housing and Urban Development that provides full funding for the Office of Federal Housing Enterprise Oversight but ignores a Bush administration request for a federally insured zero-downpayment program.The appropriators provide $60 million for OFHEO as requested by the administration. OFHEO's budget was increased by 50% in fiscal 2005, to $59.2 million, to cover the costs of a special examination of Fannie Mae's accounting policies and practices. This special examination of Fannie, which is operating under a supervisory agreement, is expected to continue until the end of this calendar year. At the same time, House appropriators rejected the administration's request for authorization language that would allow the Federal Housing Administration to start a zero-down loan program. Appropriators appear to be concerned about high FHA default rates and the potential costs of the zero-down program.