This was a vote on an amendment by Rep. Michael Turner (R-OH) that would have prohibited the federal government’s mortgage insurance program from insuring a mortgage on a home worth more than $500,000. Current prohibited the program from insuring loans in excess of $729,750.
Turner urged support for his amendment: “ Only in Washington would a government program insure a mortgage on a home worth $750,000 for a low- and moderate-income program. Permitting FHA loans on a $750,000 home puts American taxpayers at additional risk. Allowing FHA-backed loans on these expensive homes contributes to the overinflated housing values that contributed to the foreclosure crisis from the beginning…. Permitting FHA loans to purchase a $750,000 home also means fewer FHA-insured mortgages for Ohio families and for families across America who truly need them.”
Rep. Gary Miller (D-CA) urged members to oppose the amendment: “…If this were in some way impacting the federal government or taxpayers, I would absolutely agree with my good friend [Rep. Turner]….but this is not impacting taxpayers. It is not impacting FHA. It has some of the best-performing loans. Why should people who live in high-cost areas be basically penalized just because we want to pick a number of $500,000 out of the air, which will have no benefit to anybody anywhere?”
(The federal government’s mortgage insurance program is run by the Federal Housing Authority (FHA), which was established during the Great Depression to make home ownership accessible and affordable for more Americans. It insures mortgages provided to homeowners by FHA-approved private lenders. The program is intended to shield private lenders participating in the program from losses that occur when homeowners default on their loans. The program is largely “self-sustaining” – meaning the taxpayers do not finance it. To keep the program solvent, the legislation raised premiums paid by homeowners receiving loans from FHA-approved lenders.)
The House rejected the amendment by a vote of 121-301. 109 Republicans and 12 Democrats voted “yea.” 240 Democrats and 61 Republicans voted “nay.” As a result, the House rejected an amendment to housing legislation that would have prohibited the federal government’s mortgage insurance program from insuring a mortgage on a home worth more than $500,000.