Improving Fha Support for Small Dollar Mortgages Act of 2020

Floor Speech

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Mr. CLAY. Mr. Speaker, first, let me thank my colleague from Guam for yielding.

Mr. Speaker, I rise in support of H.R. 5931, the Improving FHA Support for Small Dollar Mortgages Act of 2020.

I want to start off by thanking my Financial Services Committee colleague, Congressman Stivers from Ohio, for working with my staff and me to craft a bill that will ultimately try to help close the affordable housing gap, and I look forward to working with him on other legislation and policy going forward.

H.R. 5931, the Clay-Stivers Improving FHA Support for Small Dollar Mortgages Act of 2020, would require the FHA to conduct a review of its policy to identify any barriers to supporting mortgages under $70,000, or small dollar mortgages, and submit a report to Congress within a year with a plan for removing such barriers.

In a recent report, the Urban Institute found that, despite having similar performance indicators, credit profiles, loan-to-value ratios, and lower debt-to-income ratios, the financing options to purchase, renovate, or refinance homes valued at or under $70,000 remain limited compared to mortgages between $70,000 and $150,000--and many of those homes are in our State of Missouri.

Mr. Speaker, the Urban Institute report further revealed that FHA is disproportionately failing to serve this market, despite its mission to serve underserved borrowers. Specifically, the report found that FHA serves 24 percent of the overall market but only 19 percent of the small dollar mortgage market.

Again, I urge my colleagues to support this bipartisan study to identify any barriers to supporting these small dollar mortgages and report to Congress within a year a plan for removing such barriers to financing for creditworthy borrowers.

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