The US House of Representatives passed the Transportation, Housing and Urban Development (THUD) appropriations bill for FY 2011 by a vote of 251 to 167 on Thursday.

When the debate began, the Federal Housing Administration’s reverse mortgage program had a $150 million appropriation but passed with $140 million.  While the number may be lower, debate among members of the House proved that representatives in Washington, DC, are getting behind the program.

Rep. E.B. Johnson, D-Texas, introduced an amendment to increase funding for HUD’s Community Development Grant program by $10 million and reduce funding for the Mutual Mortgage Insurance Program by the same amount.  The money would be taken from the reverse mortgage program.

“This program is not without controversy, many do not understand that the proceeds may impact medicaid eligibility,” she said.  ”At a time when property values remain low, a reverse mortgage might not be the best route for individuals”.

Johnson’s amendment was approved but not without opposition from ranking Republican and Democratic leaders in the House.

Interestingly enough, ranking minority member of the THUD Subcommittee, Tom Latham, R-Iowa, opposed reducing the amount of money available for the program.  He introduced an amendment last year to take away the $798 million appropriation needed and lead to a 10% principal limit reduction for the HECM product.  His views of the program have clearly changed.

“My concern is that this is taking money out of reverse mortgages for seniors,” he said on the House floor.  ”The problem is that if there is an increase in demand, it simply can not happen without the funding.”

Chairman of the THUD Subcommittee, John Olver, D-Maryland stepped in and voiced his opposition as well.  However, Olver said he was assured that after looking at the HECM situation and the needs of the program, it could yield the $10 million dollar offset.  According to sources in Washington, HUD assured Olver the $10 million wouldn’t have any impact on the program for the next fiscal year.

Having both ranking Republican and Democratic members of the THUD Subcommittee step up to support the HECM program is a big change from last year.

“It’s a great reflection of the kind of support we have in Washington today,” said Jeff Lewis, Chairman of Generation Mortgage and the leader behind the Coalition for Independent Seniors.  ”People need to recognize that there will be a lot of incidents along the way, but we are in a much better place on Capitol Hill than we were a year ago.”

The Senate has yet to bring its THUD appropriations bill to the floor and it’s not clear when that will happen, but support for the program in the Capital is clearly improving.