Reps. Carney, Delaney, & Himes File Housing Finance Reform Legislation To Protect 30-Year Mortgage & Taxpayers

Press Release

Representatives John Carney (DE-At Large), John K. Delaney (MD-6), and Jim Himes (CT-4) have introduced legislation designed to protect the fixed-rate 30-year mortgage -- a key instrument to ensure home affordability for the middle class -- and shield American taxpayers from future bailouts by reforming the housing finance system. The Partnership to Strengthen Homeownership Act combines the private sector's superior ability to price risk with the federal government's unique ability to provide capacity.

Original cosponsors of The Partnership to Strengthen Homeownership Act are: Rep. Denny Heck (WA-10), Rep. Gregory Meeks (NY-5), Rep. Patrick Murphy (FL-18), Rep. Jared Polis (CO-2), Rep. Mike Quigley (IL-5), Congressman David Scott (GA-13), Rep. Kyrsten Sinema (AZ-9), and Rep. Peter Welch (VT-At Large).

"This proposal seeks to preserve housing affordability while protecting taxpayers from another bailout," said Congressman Carney. "It finds the middle ground between public sector and private sector involvement in the housing sector. If we to want to preserve the dream of home ownership and make sure taxpayers aren't on the hook for another bailout -- the status quo has to change. Our bill is the right policy, and it's also an approach that appeals to both sides of the aisle. As Congress works to reform our housing finance system, I'm optimistic that a proposal like ours -- that combines private sector pricing with the government's ability to expand access to credit -- can cut through the partisan divide."

"Without access to quality affordable housing, there's no American Dream for millions of middle class families," said Congressman Delaney. "I'm proud to work with Congressman Himes and CongressmanCarney on legislation that keeps the fixed-rate thirty-year mortgage alive and preserves a government guarantee while introducing greater fiscal responsibility and stability to the housing finance system. The financial crisis and the bailout of Fannie Mae and Freddie Mac made it clear that we need reform to protect taxpayers. The Partnership to Strengthen Homeownership takes the best ideas from both parties to create a 21st century housing finance system that combines the strengths of the private sector and the public sector. Housing finance reform is too important for us to ignore and I look forward to working with my colleagues in both parties in moving this legislation forward."

"This bill ensures that new homeowners will continue to have access to the affordable, predictable financing options they need, while safeguarding taxpayers and our economy from future downturns," saidCongressman Himes. "Our legislation brings together the market's efficiency in pricing risk with government's unique ability to provide scale to create a safer, more liquid housing market that preserves access to affordable housing for American families."

This legislation, first introduced last Congress, establishes an insurance program through Ginnie Mae which maintains the full faith and credit of the federal government, but protects taxpayer investment by requiring adequate private sector capital and accurate pricing of government reinsurance. All government guaranteed single-family and multi-family mortgage-backed securities will be supported by a minimum of 5% private sector capital, which will stand in a first loss position. The remaining 95% of the risk will be shared between Ginnie Mae and a private reinsurer on a pari passu basis. Fees paid to Ginnie Mae for providing these securities will be allocated to affordable housing programs. The bill winds down Fannie Mae and Freddie Mac and allows them to be sold and recapitalized.

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