House Panel Okays DPA Bill

The House Financial Services Committee has approved a bill that would allow nonprofit housing groups to continue to arrange downpayment assistance on Federal Housing Administration loans and give the FHA some latitude in pricing mortgage insurance premiums based on risk. The bill (H.R. 6694) would reverse provisions in a major housing bill Congress passed this summer that bans seller-funded downpayment assistance on FHA loans starting Oct. 1 and bars the FHA from using risk-based pricing for 12 months. The House is expected to pass the bill despite opposition from the Department of Housing and Urban Development. HUD has been trying to shut down the DPA programs for years because of high default and claim rates. When it comes to RBP, the department contends that the bill is too restrictive. "The RBP portion of the bill would make permanent the recently enacted [12-month] moratorium, which HUD strongly opposed, and place very tight restrictions on FHA's pricing structure," the department said. "HUD does not support it." The House is expected to pass H.R. 6694, but it will die in the Senate, according to industry lobbyists.