YOU ARE HERE: LAT HomeCollections

Senate Votes to Retain FHA Insurance Program

December 22, 1987|United Press International

WASHINGTON — The Senate on Monday night approved major housing legislation that would make permanent the popular Federal Housing Administration home mortgage insurance program.

The $15-billion bill was approved by voice vote and sent to the House, where it is also expected to clear before adjournment. President Reagan supports the measure.

Not anticipating congressional action before the session ended, Reagan earlier in the day signed a stopgap extension of the FHA insurance program through March 15. It was the fifth time in the last two months that Congress and the President have temporarily extended the program.

The measure would be the first major housing bill approved by Congress in seven years.

But Senate and House managers were forced to scale the measure back sharply to win approval and turn away budgetary objections that had blocked previous efforts this year to pass a bill.

Ownership Dream

Sen. Alan Cranston (D-Calif.), the bill's floor manager, said the bill would "help Americans retain the dream of home ownership . . . and prevent thousands of elderly from being forced out of their apartments."

Sen. Alfonse M. D'Amato of New York, the Republican leader for the bill, said it was a "reasonable package, it is a responsible package, and it is a package that promotes responsible federal involvement in housing and community development during difficult budgetary times."

The stripped-down bill, patterned after one killed by Republican objections, authorizes $15 billion for fiscal 1988--$900 million lower than the bill passed by the House and $600 million under the Senate bill. It is also $300 million under a fiscal 1987 appropriations freeze.

Senate-House negotiators shaped the bill to eliminate or change sections that drew objections on grounds that they violated budget ceilings.

But the bill also provided some major new programs in housing.

The measure would allow public housing tenants for the first time to organize and manage the building in which they live and to give them the option of buying the projects from the government.

Distressed Neighborhoods

Another part of the bill would encourage home ownership in distressed neighborhoods by providing grants of up to $15,000 to low and moderate income families to help them purchase new or substantially rehabilitated homes.

The grant program would be limited to $25 million in fiscal 1988 and $100 million in fiscal 1989. The program would replace an existing one that provides mortgage insurance and interest subsidy for low and moderate income home buyers.

The bill would also increase from $90,000 to $101,250 on single homes the amount that the FHA can provide in mortgage insurance.

Several new programs, contained in the original bill, were eliminated.

Among them were a provision that would have provided direct loans for troubled projects to prevent defaults and a provision to provide grants for low-income housing in rural areas, which was changed to loans.

Los Angeles Times Articles