Improving Fha Support for Small-Dollar Mortgages Act of 2021

Floor Speech

BREAK IN TRANSCRIPT

Ms. PRESSLEY. Madam Speaker, I move to suspend the rules and pass the bill (H.R. 1532) to require a review of the effects of FHA mortgage insurance policies, practices, and products on small-dollar mortgage lending, and for other purposes.

BREAK IN TRANSCRIPT

Ms. PRESSLEY. Madam Speaker, I yield myself such time as I may consume.

Madam Speaker, when it comes to promoting access to homeownership, much of the focus tends to be on how high housing prices are pricing many borrowers out of homeownership. But the landscape of homeownership opportunities is varied, and for many communities, the lack of access to traditional mortgage financing for small-dollar mortgages continues to be a major barrier.

Specifically, I am talking about mortgage financing for homes that are priced at $70,000 or less. For many rural communities, and predominantly communities of color that are struggling to overcome the impacts of the foreclosure crisis, there are lower-value homes that would otherwise be ideal homeownership opportunities for first-time home buyers and working class families, but the lack of traditional mortgage financing options acts as a barrier to those opportunities.

Data from the Urban Institute shows that these small-dollar mortgages are denied by lenders at double the rate compared to larger loans, and this trend cannot be explained away by differences in the creditworthiness of applicants.

The bottom line is that lenders don't make as much money originating these smaller loans, so they are less likely to make loans on collateral that don't maximize their profit.

The Federal Housing Administration was designed to serve underserved markets and could be instrumental in promoting more small-dollar mortgage lending, but the data shows that the FHA is actually disproportionately failing to serve this market. So this bill would require the FHA to identify barriers to better serving the small-dollar mortgage market and to come up with an actionable plan to reduce those barriers.

This bill is desperately needed at a time when mortgage rates are at historic lows and home prices continue to rise. We must support affordable housing options for individual borrowers and their pursuit of the American Dream of homeownership.

BREAK IN TRANSCRIPT

Ms. PRESSLEY. Madam Speaker, I yield myself the balance of my time.

Madam Speaker, I thank Representative Tlaib for her work on this important bill, as we work to improve access to affordable homeownership. This bill is an important step that will help us better understand and break down the barriers to obtaining traditional mortgage financing for small-dollar mortgages.

Madam Speaker, I yield back the balance of my time.

BREAK IN TRANSCRIPT

Source