STATEMENT BY HUD SECRETARY SHAUN DONOVAN ON HOUSE PASSAGE OF H.R. 5072

June 10, 2010

WASHINGTON - Today the U.S. House of Representatives passed the FHA Reform Act (H.R. 5072) in a near unanimous vote of 406 - 4. The bill enables the Federal Housing Administration to reform its current mortgage insurance premium structure by shifting some of the upfront cost to the annual premium - a move that will increase FHA’s capital reserves and reduce risks to the FHA insurance fund while cushioning the impact on the consumer. Further, the bill includes provisions to improve FHA loan performance and capital reserves while continuing to support the broader housing market and recovery and preserving FHA’s role in providing homeownership opportunities to responsible underserved borrowers.

The following is a statement by HUD Secretary Shaun Donovan:

"We are pleased that the U.S. House of Representatives passed the FHA Reform Act of 2010 today by an overwhelming margin.

"The FHA is playing a vital role in the current housing market. We must remain mindful that qualified, responsible families need continued access to affordable homeownership options. The changes that we are implementing coupled with this bill will ensure that FHA can continue to serve as a bridge to economic recovery and that mortgage financing remains available until private capital returns.

"I am grateful to the members of Congress who worked diligently on this bill - specifically, Housing and Community Opportunity Subcommittee Chair Maxine Waters, Financial Services Committee Chair Barney Frank and Subcommittee Ranking Member Shelley Moore Capito. We look forward to quick action by the Senate on this proposal to encourage responsible homeownership while further reducing risk to the American taxpayer."

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