Home Builders Urge Big Jump in FHA Adjustable Mortgages
An industry group urged Congress Thursday to increase the amount of FHA-insured adjustable-rate loans that may be issued annually.
Donald Martin, president of the National Association of Home Builders, told House Banking's housing subcommittee that current limits on the loans prevent many low- and moderate-income borrowers from obtaining mortgages.
The home builders group "wholeheartedly supports an increase in the number of adjustable-rate mortgages FHA can insure," Mr. Martin said.
The provision is included in a broad bill sponsored by the subcommittee chairman, Rep. Rick Lazio, R-N.Y., that would affect federal housing programs
Under current law the number of FHA adjustable loans may not exceed 30% of the total number of FHA mortgages issued in the previous year. Because of the limit, the number of adjustable FHA mortgages is capped at 237,107 for fiscal year 1998.
The legislation would raise the cap to 40% of the previous year's total loans, a level that would have allowed another 79,036 adjustable mortgages this year.
But Mr. Martin urged lawmakers to go further. "If Congress believes a cap is needed, 50% would better serve the thousands of prospective purchasers who rely on FHA-insured adjustable-rate mortgages to qualify for a home purchase," he said. …