Improving Fha Support for Small Dollar Mortgages Act of 2020

Floor Speech

Mr. Speaker, I rise in support of H.R. 5931, the Improving FHA Support for Small Dollar Mortgages Act.

Studies suggest that borrowers of small dollar mortgages, those amounts under $70,000, may be disproportionately denied when compared to loans of higher amounts, even when the credit profiles of the borrowers are similar.

Specifically, the Urban Institute reports that, in 2015, roughly 25 percent of homes purchased for $70,000 or less were financed with a mortgage compared to 80 percent of houses worth between $70,000 and $150,000.

If there is such a disproportionate amount of denials, this could be an issue for families in my district and many others who are trying to buy a first home, particularly in our rural communities across our country.

H.R. 5931 is a bipartisan bill sponsored by Representative Clay of Missouri and Representative Stivers of Ohio and was reported to the House by the House Financial Services Committee last week. This bill seeks to better understand what is happening in small dollar mortgage lending.

This bill asks the fundamental question: Are there borrowers who otherwise qualify for a mortgage who are being left out of the market as an unintended consequence of FHA's own rules and regulations?

After all, the FHA mission is to serve creditworthy borrowers without bias, no matter what the loan size is. If FHA can identify how its own regulations are hurting borrowers' access to credit and remedy the problem without affecting the health of the Mutual Mortgage Insurance Fund, then they should do so.

Mr. Speaker, I would like to thank my friends, Mr. Clay and Mr. Stivers, for bringing this issue to our attention and for their work on this bill. I would like to take the opportunity to thank my friend from Guam for managing this bill this afternoon.

H.R. 5931 is a positive example of Congress identifying a problem and working together to understand the causes and to identify a reasonable solution.

Mr. SAN NICOLAS.

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Mr. HILL of Arkansas. Mr. Speaker, H.R. 5931, as I say, is a good example of both sides in this House working together for a worthy purpose. I support the bill. I urge all my colleagues to support it, and I yield back the balance of my time.

Mr. SAN NICOLAS.

Mr. Speaker, I would like to thank my colleagues, Mr. Clay and Mr. Stivers, for their partnership on this important bill, and my colleague, Mr. Hill, for his work with me today as we seek to improve access to affordable homeownership.

This bill is an important step to better understand the barriers to obtaining traditional mortgage financing for small dollar mortgages and begin to reduce those barriers.

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