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Statement from AmeriDream, Inc. President & CEO Ann Ashburn Regarding legislation to modernize the Federal Housing Administration

AmeriDream, Inc. President & CEO Ann Ashburn released the following statement on legislative proposals that would modernize and reinvigorate the FHA:

“Families, who want to share in the dream of homeownership, but have less than perfect credit, need and deserve a safe option. FHA modernization legislation, if done right, has the opportunity to increase homeownership for millions of Americans by offering them a safe alternative to exotic high-cost mortgages. While AmeriDream applauds legislative efforts to expand homeownership opportunities through FHA, we are also concerned that some of the proposed features will unfairly harm the individuals and families that FHA is intended to protect.

AmeriDream is supportive of increased loan limits to make FHA financing a viable option in high cost areas. By doing so FHA would again be available in areas where risky sub-prime financing was the only option to purchase a home. We believe this measure; together with the flexibility to increase the term of the loan will help this government program fill a gap while also making homeownership more affordable.

We are also hopeful that as members of Congress debate risk-based pricing and what could be as high as 103 percent loan-to-value, they will adhere to FHA’s original mandate to provide affordable homeownership opportunities for first-time homebuyers, minorities, and other underserved populations. Thus continuing to protect these future homeowners while not adding financial burdens such as a risk-based pricing tax or allowing loans to exceed the property’s appraised value to those who can least afford it. As the country is experiencing fallout from overly aggressive sub-prime loans, we want to be careful not to repeat these mistakes only now through a government program.

AmeriDream believes that any legislation that modernizes the FHA insurance program should include components from other successful programs. This includes: 1) current down payment assistance programs implemented by nonprofit organizations that leave the homeowner with positive equity that is a critical safety net for FHA borrowers, 2) a blind draw appraisal system which provides additional independence in determining a home’s true value, and 3) homebuyer education for everyone who receives a down payment gift from any allowable source.

We look forward to joining in discussions with policy makers, lenders, and other stakeholders in this effort to modernize FHA and forward the dream of a homeownership society.”

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