Newspaper article THE JOURNAL RECORD

Realtor Sees Advantages in FHA Insurance Program

Newspaper article THE JOURNAL RECORD

Realtor Sees Advantages in FHA Insurance Program

Article excerpt

WASHINGTON _ Proposals affecting the Federal Housing Administration's single-family mortgage insurance program will increase home ownership opportunities throughout the country for those who have no other financing alternatives, according to Rick Adams, a Realtor from San Antonio, who testified Thursday on behalf of the National Association of Realtors at a hearing before the House Subcommittee on Housing and Community Development.

Adams, vice chairman of NAR's Public Policy Coordinating Committee, commented on a series of affordable housing initiatives proposed by the Department of Housing and Urban Development (HUD), emphasizing the benefits that FHA-insured loans offer to home buyers who do not qualify for privately-insured mortgages.

Adams cited NAR research to show how FHA's mortgage insurance programs typically serve buyers who have lower incomes, make smaller down payments and purchase less expensive homes than those served by the conventional market.

"FHA has proven to be a key financing tool for first-time buyers _ teachers, police officers, fire fighters, postal carriers _ in short, America's mainstream workers who are trying to buy modest homes," he said.

Adams said low down payment plans developed by some private mortgage insurance companies as an encouraging sign for potential low- and moderate-income home buyers, but added, "these programs must be placed in perspective. They are new products that simply are not available in all markets . . . they lack the national reach of the FHA program."

The specific FHA proposals addressed by Adams included a proposed increase in FHA's single family mortgage insurance limit from $151,750 to $172,675. Adams testified that when this limit fails to keep pace with an area's median home price, "FHA becomes virtually useless to those who need it most." According to Adams, the proposal to raise the limit to $172,675 would allow first time buyers a greater chance to purchase homes in areas where median prices have risen beyond FHA loan limits.

"Our research shows that this increase would permit approximately 276,000 additional families nationwide to use FHA to purchase a home," Adams said. …

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