Senate Passes HUD '06 Budget

The Senate has approved the Department of Housing and Urban Development's fiscal year 2006 appropriations bill, which provides only $50 million for the president's downpayment assistance program and rejects a Bush administration proposal to create a federally insured zero-downpayment loan program.The HUD budget is part of the Transportation, Treasury, and HUD appropriations bill, which the Senate approved by a 93-1 vote Oct. 20. The vote clears the way for Senate and House appropriators to meet in conference and agree on a final bill. The House appropriations bill has similar FHA provisions. The Senate Appropriations Committee report accompanying the bill is highly critical of the Federal Housing Administration single-family program, calling FHA a "lender of last resort" for borrowers who are "likely to default." In rejecting the president's request for $200 million for downpayment assistance, the committee report says "this program may be helping families with excessive credit risk and who may not be the best candidates for homeownership." The Office of Federal Housing Enterprise Oversight receives $60 million, as requested by the administration, under the House and Senate bills. OFHEO regulates Fannie Mae and Freddie Mac. Both appropriations bills include provisions that block the Treasury Department from approving the entry of banks into the real estate brokerage business.