Statements on Introduced Bills and Joint Resolutions

Floor Speech

BREAK IN TRANSCRIPT

Mr. REED. Madam President, today I am introducing the Helping More Families Save Act with Senator Britt. This bipartisan legislation would help more families in HUD-assisted housing build savings and improve their financial security by creating a pilot program for Family Self- Sufficiency, FSS, universal escrow accounts.

The FSS Program was established under the National Affordable Housing Act of 1990 to help low-income families boost savings and improve their professional, educational, and financial standing. In 2018, I worked with then-Senator Roy Blunt to expand the program to cover more households. Today, millions of public housing residents. Housing Choice Voucher Program participants, and residents of project-based rental assistance, PBRA, housing are eligible for FSS.

FSS provides two key tools for its participants. First, households work with FSS coordinators to develop long-term financial, professional, or educational goals. FSS coordinators also help connect participants with resources, training, and employment opportunities. Second, the program encourages FSS families to save by providing them with an interest-bearing escrow account. Participants who increase their incomes deposit a portion of their addditional earnings into their escrow account instead of paying higher rent, as is typically required under federally subsidized housing programs. Upon graduation from the FSS Program, families can use their escrowed savings to pay for job-related expenses, move to private market housing, buy a home, or save for the future.

After more than 30 years, FSS has become a proven financial independence program. Indeed, in 2021 27 percent of FSS graduates no longer needed Federal rental assistance within 1 year of leaving FSS, while 11 percent of graduates were ultimately able to purchase their own home, FSS graduates with escrow savings, on average, had approximately $9,495 in their account upon leaving the program--a substantial sum for low-income families.

Despite the program's success and broad eligibility, program participation was effectively capped at about 70,000 enrollees in 2023 because there is simply not enough Federal funding for the required FSS corordinators.

The Helping More Families Save Act would help more Americans access the program by creating a anew universal escrow pilot. Under the bill, public housing agencies, PHAs, and PBRA property owners could offer a limited number of additional households escrow accounts identical to those under the current FSS Program without having to wait for an FSS coordinator to be funded by the Federal Government. Although PHAs and PBRA property owners would not be required to offer Coordinator services to these participants, we expect many will work to offer appropriate counseling and support on their own or with outside partners. Moreover, we expect that this pilot will show that those enrolled in the program will be successful and make wise decisions.

If successful, the pilot program could help more low-income families improve their financial security, achieve economic independence, and even purchase their own homes, all with minimal cost to the Federal Government.

This is a commonsense, bipartisan proposal that has the potential to help lift more American families out of poverty. It is a win for families, the Federal budget, and our economy. I thank Senator Britt for coleading this legislation and Compass Working Capital and LISC for their support. I urge our colleagues to cosponsor the Helping More Families Save Act and support its passage. ______

By Mr. REED (for himself and Ms. Lummis):

S. 3905. A bill to amend title I of the National Housing Act to increase the loan limits and clarify that property improvement loans may be used for construction of accessory dwelling units; to the Committee on Banking, Housing, and Urban Affairs.

BREAK IN TRANSCRIPT

Mr. REED. Madam President, today I am introducing the Property Improvement and Manufactured Housing Loan Modernization Act with Senator Lummis. This legislation would strengthen the Federal Housing Administration, FHA, title I loan program to both help more families find and own an affordable home and better preserve our existing housing stock.

Like its better known title II sister program, FHA title I expands access to housing and boosts affordability for families by insuring private market loans. However, title I is targeted towards two underserved portions of our housing market--manufactured homes and property improvement.

For decades, title I has provided low-cost loans that help more families afford a manufactured home or make necessary improvements to their existing home, while expanding and preserving critical portions of housing supply. Indeed, manufactured homes are the largest source of unsubsidized affordable housing in the country, and property improvement loans help prevent more single-family homes and apartments from falling out of our housing stock.

These loans should be a central tool helping to close our nationwide housing shortage, which Freddie Mac estimates at 3.8 million homes. However, outdated loan limits and statutory restrictions have weakened title I's effectiveness and turned the program from success to a missed opportunity.

From the mid-1980s, through the early 1990s lenders offered 15,000 to 25,000 title I manufactured home loans each year, but in 2021, only 3 loans were issued. Similarly, lenders have gone from making more than 70,000 title I property improvement loans annually in the 1990s to making fewer than 1,000 in 2022. That is a 99-percent drop in loan volume. In other words, as many as 99,000 fewer homes being bought, preserved, and included in our housing stock each year.

The Property Improvement and Manufactured Housing Loan Modernization Act would refurbish title I and return it to our housing toolbox. It would expand loan limits and loan terms for all title I loans--making the program fit market demand and needs. Perhaps more importantly. the bill would finally allow FHA to index property improvement loans for inflation and expand the data it uses to set manufactured home loan limits, ensuring title I will remain a crucial tool as home costs rise in future years.

Finally, our legislation makes accesible dwelling units, ADUs, which are small housing units added to a single-family property often for use by a family member, eligible for title I financing. In other words, our bill will make the revamped title I program an even more powerful home- creation program than it was during its prior peak years and will particularly help families who want to provide a safe, comfortable place for aging parents or young adult children to live.

Collectively, these improvements would help more families own a home, remain in homes they have spent decades in, and find an affordable place to live. I urge my colleagues to join Senator Lummis and myself, cosponsor this bill, and support its passage.

BREAK IN TRANSCRIPT

Source