FHA Loan Reform - One Step Closer To Becoming Law
The Senate Banking Committee has approved its version of the FHA reform bill passed earlier this week by the House of Representatives. Passing by a vote of 20-1, the legislation must now go to a vote of the full Senate before it can be signed into law.
“These changes will help make FHA a more effective and fiscally sound tool for homeownership,” said Sen. Christopher Dodd (D-Conn.), the chairman of the Senate Banking Committee.
Some of the key provisions of the House bill, HR 1852, include:
On Tuesday, the House passed legislation that would increase the maximum term of FHA-insured mortgages to 40 years from 35 years, raise the agency’s loan limit to $730,000 from $362,000 and reduce the minimum down payment and credit score required of borrowers.
Additionally,
the legislation would make it easier for brokers to become FHA licensed as an arduous audit has been replaced with a fidelity bond requirement.
Upon Senate approval, the contents of the two pieces of legislation need to be reconciled before President Bush can sign them into law.