A package of six appropriations bills that passed the House of Representatives late last month included language that allows the Federal Housing Administration (FHA) to continue insuring Home Equity Conversion Mortgage (HECM) loans. This is according to an announcement by the National Reverse Mortgage Lenders Association (NRMLA) and the language of the legislative package as reviewed by RMD.
The package, collectively known as the 2023 Transportation, and Housing and Urban Development, and Related Agencies (THUD) appropriations bill, passed the House of Representatives 220-207, a virtually party-line vote which saw all Democrats vote yes while all Republicans voted no, save for four members who did not vote according to the official tally.
“The 2023 Transportation, and Housing and Urban Development, and Related Agencies funding bill provides funding of $90.9 billion, an increase of $9.9 billion – more than 12% – above 2022,” reads an announcement by the House Appropriations Committee. “This includes an increase of $8.9 billion for the Department of Housing and Urban Development and $833 million for the Department of Transportation. In total, the bill provides $168.5 billion in total budgetary resources, an increase of $11.5 billion above 2022.”
Late last week, the Senate released its own version of the appropriations bill, which carried over the same language pertaining to the HECM program as its House counterpart, according to NRMLA in an email announcement to members. NRMLA also said that its work played “a critical role” in getting the language into the package.
The current statute governing the HECM program places a limitation, or “cap,” on the number of HECM loans that FHA can insure. This cap has been routinely suspended by Congress since 2007, however.
Near the end of the Trump administration in its final budget proposal, HUD under the direction of Secretary Ben Carson sought to permanently remove the cap. This recommendation continued into the Biden administration’s first released budget proposal and reappeared in the budget request congressional justifications document issued earlier this year.
“This proposal would eliminate the statutory cap on the number of HECM loans that can be insured by FHA, which is routinely waived in the 2023 Budget and Appropriations Acts,” it reads. As described, this limit was indeed waived in the latest budget proposal.
Read the passage’s announcement at the House Appropriations Committee.