The bill is the third major housing finance reform proposal by Members of Congress this year. H.R. 5055 provides for substantial funding for the NHTF. The bill has a dozen co-sponsors but none from NJ.
Just as other proposals being considered in the House and Senate, the bill would wind down the government sponsored enterprises Fannie Mae and Freddie Mac.
It would also:
Create a mortgage insurance program run through the Government National Mortgage Association (Ginnie Mae), a government-owned corporation housed at HUD.
Provide a full government guarantee on qualifying mortgage securities backed by mortgages that meet certain eligibility criteria.
Propose that private capital would have a minimum 5% first-loss risk position. The remaining risk would be split between Ginnie Mae and private reinsurers.
Under the bill, in return for insuring securities, Ginnie Mae would charge a fee of 10 basis points on the total principal balance of insured mortgages. The bill would apply 75% of this fee revenue to the National Housing Trust Fund (NHTF), 15% to the Capital Magnet Fund, and 10% to a new Market Access Fund.
“I want to thank you for creating a robust dedicated source of revenue for the National Housing Trust Fund (NHTF) in the Partnership to Strengthen Home Ownership Act. We are grateful for your strong support of the NHTF and your prioritization of the housing needs of very poor people.”
NLIHC President and CEO Sheila Crowley said in a letter to the sponsors of H.R. 5055.