Rural Housing Preservation And Stabilization Act Of 2010

Floor Speech

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Mrs. CAPITO. Mr. Speaker, I would like to thank my colleague, Mr. Kanjorski, for his good, solid work on this bill. We have worked well together on H.R. 5017, and I think we see the results of that work together here today on the floor.

This legislation extends the USDA 502 loan guarantee program. This program is a very important homeownership tool for many rural Americans, many of whom live in my State of West Virginia, providing a loan guarantee on privately issued loans. The 502 program has a very low default rate.

Over the last few years, demand for the program has increased, and consequently loan commitment authority for the 502 program will be exhausted. Without swift action, borrowers who rely on this program will run out of options for affordable home loans.

Last week, I offered an amendment during the markup of H.R. 5017 in the Financial Services Committee that provides the 502 program with additional loan commitment authority and makes an important improvement to the program. In order to make the program self-sufficient, we are raising the guaranteed fee up to 4 percent, granting the Secretary the authority to choose the appropriate level. This ensures that the program will no longer be reliant on taxpayer funds to build capital reserves, a welcome part of the 502 program.

Although I am committed to continuing to work with my colleagues on potential long-term modifications to the 502 program that serve the best interests of the homeowners and the taxpayers, I believe it is important that the language increasing the loan commitment authority to $30 billion be limited to the current fiscal year and not beyond that time period. We must be aware of the impact on the private market and ensure that private entities are able to regain appropriate market share.

Mr. Speaker, with these changes, we strike a balance of extending the program through the rest of the year. I, and I'm sure many of my colleagues here, have heard from numerous Realtors, lenders and potential homebuyers about the situation that the 502 program has found itself in. Since its inception, the 502 program has helped hundreds of thousands of families with low to moderate incomes realize homeownership. Over the past several weeks, as I said, many constituents have contacted me stressing just how important this program is as they are on their path towards homeownership and wish to see its continued funding.

Again, I would like to thank Mr. Kanjorski for working with me on this legislation.

I reserve the balance of my time.

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Mrs. CAPITO. Mr. Speaker, I would just, again, reiterate my support for this bill. I think it's timely. It's something that we want to do in an expeditious and responsible manner, and I believe that this bill addresses those concerns.

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