Congress Passes Landmark Housing Legislation that Includes Several Provisions Authored by Reed

Press Release

The U.S. Senate today passed landmark housing legislation by a vote of 72 to 13. The Housing and Economic Recovery Act of 2008 contains several key provisions authored by U.S. Senator Jack Reed (D-RI), a senior member of the Senate Banking Committee, who helped shepherd the bipartisan bill through the process and negotiated critical components to end Republican obstructionism of the bill's progress. The U.S. House of Representatives passed the measure on Wednesday, 272 to 152.

"This legislation will help stabilize the housing market and begin to revive our economy," said Reed.

Included in the legislation is Reed's initiative to dramatically expand Fannie Mae's and Freddie Mac's affordable housing mission by creating a new Housing Trust Fund and Capital Magnet Fund, financed by annual contributions from the companies, which will be used for the construction of affordable rental housing. These programs are expected to generate hundreds of millions of dollars annually for the building and preservation of affordable housing. The bill also demonstrates Congress's commitment to ensuring that the companies have to support affordable housing in exchange for the aid the companies receive under the bill.

"The housing crisis is perhaps the most significant economic issue that we face and this bill will go a long way toward bringing stability and confidence back to the markets," said Reed. "For the first time in over a generation, we are passing legislation to update, modernize, and strengthen the institutions that undergird both our mortgage and housing markets. I believe it will help stabilize our economy by ensuring access to decent, safe, and affordable housing for millions of American families."

The Housing and Economic Recovery Act of 2008 will strengthen and improve the regulation of Fannie Mae and Freddie Mac; modernize and update the Federal Housing Administration (FHA); enable struggling homeowners at risk of foreclosure to refinance into 30-year, fixed-rate conventional mortgages; and require licensing standards for mortgage brokers.

The bill also includes almost $4 billion in new Community Development Block Grant (CDBG) funding to help communities impacted by foreclosures purchase and rehabilitate foreclosed properties; $150 million in grants for homeownership counseling; assistance for returning soldiers; and tax benefits for homeowners, homebuyers, and homebuilders aimed at helping the housing market recover.

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