Housing Opportunity Through Modernization Act of 2015

Floor Speech

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Mr. HINOJOSA. Mr. Chairman, today I rise to offer an amendment to H.R. 3700, entitled, the Housing Opportunities Through Modernization Act of 2015.

I want to thank Mr. Luetkemeyer for his hard work on this bill and for the bipartisan and collaborative way in which he went about this important housing reform. I also wish to thank the ranking member, Ms. Maxine Waters of California, for her hard work and for always looking out for those most needy in our society and for working to improve this bill.

My amendment would authorize a nominal user fee on lenders accessing the underwriting systems for the Section 502 Single Family Housing Guaranteed Loan Program. This fee would not exceed $50 per loan and would enable the United States Department of Agriculture to make much- needed upgrades to their automated underwriting system in order to match industry standards.

Mr. Chairman, I believe that access to safe, decent, and affordable housing can transform lives. Federal programs like the Section 502 Single Family Housing Guaranteed Loan Program play a critical role in expanding home ownership and opportunity for our rural communities. This Federal program has helped over 2 million families build wealth through the equity in their home and encourages lenders to provide loans to those who cannot usually obtain conventional financing.

Through this program, lenders are enabled and encouraged to serve borrowers they might typically reject without the guarantee, increasing borrowers' access to home ownership opportunities. We owe it to our rural communities to provide the Section 502 program with the resources it needs to modernize and to continue expanding home ownership and opportunity in our most underserved rural communities.

The Single Family Housing Guaranteed Loan Program relies on the Guaranteed Underwriting System for determining loan approvals quickly and accurately. Unfortunately, the current system is in need of substantial technological improvements in order to process risk requests more efficiently. Guaranteed Underwriting System development is necessary for sound portfolio risk management and will benefit USDA field staff, rural borrowers, and private sector lenders alike.

My amendment will cover the cost of developing and maintaining the Guaranteed Underwriting System and enable the Single Family Housing Guaranteed Loan Program to be administered in a more effective manner, despite recent staffing reductions.

The nominal fee authorized by my amendment will be used to enhance and maintain the Guaranteed Underwriting System and bring it into the 21st century. It is expected that a fee ranging between $25 and $50 will generate approximately $4 million a year, starting in 2018. The fee will support important program improvements, including the delegation of underwriting to preferred lenders.

The fee will also develop the underwriting system's technological capabilities to current standards, including enhanced loan and lender oversight, metrics, and programatic controls. This efficiency upgrade will allow USDA staff to allocate the necessary time and resources to the most complex underwriting decisions.

Finally, Congress has long invested in making rural home ownership a reality. The Section 502 Single Family Housing Guaranteed Loan Program receives $24 billion a year and has helped millions of families reach the dream of home ownership.

Mr. Chairman, my amendment supports the USDA fiscal year 2016 budget request and is supported by prominent rural housing advocacy groups such as the National Rural Housing Coalition and the Housing Assistance Council. I urge all my colleagues on both sides of the aisle to support this amendment.

Mr. Chairman, I yield back the balance of my time.

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