Expanding American Homeownership Act of 2007

EXPANDING AMERICAN HOMEOWNERSHIP ACT OF 2007 -- (House of Representatives - September 18, 2007)

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Mr. ROYCE. Madam Chairman, I rise in support of this amendment, and I rise in opposition to the financing of an affordable housing fund.

I don't believe that this fund should be included in legislation to update and improve the Federal Housing Administration. I hope my colleagues will join me in opposing the underlying bill if this provision is included in the legislation.

In 2005, I offered an amendment in the Committee on Financial Services to strike the creation of an affordable housing fund. Part of this is philosophical, but ideas have consequences and bad ideas have bad consequences in the long run. As I said 2 years ago, this fund is straight out of central planning 101. It should not be supported by this body.

I think by now we should be able to agree that government housing grants do little to increase homeownership levels in this country. If these funds must be derived, they should be geared towards ensuring that the FHA remains solvent rather than supporting an experiment in socialism here.

Furthermore, this fund could not be proposed at a worse time, as we see the current spike in foreclosures in the subprime mortgage market, many of which are backed by the Federal Housing Administration. Homeownership rates improve when real interest rates are low and when consumer incomes are rising, are going up. I believe free market policies are the most effective way to generate those results, creeping towards socialism will not. This fund will waste resources and provide false hope for those who wish to increase homeownership.

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