Last week, NAR 2009 President Charles McMillan testified before the House Financial Services Housing Subcommittee on the recent (and upcoming) changes to the FHA single-family guarantee program. In his testimony, Charles stressed the importance of FHA and the critical role it is playing in our nation's economic recovery. With respect to the changes, FHA has increased the upfront premium for borrowers while it awaits legislative authority to increase the annual premium. They have said they will decrease the upfront when the can increase the annual premium. NAR supports changes to replenish the FHA reserves, but urges prudence in not unnecessarily increasing costs to borrowers. NAR also expressed concerns with the credit score changes proposed by FHA due to the disparate impacts credit scoring models have on minorities. FHA also plans to propose decreasing allowable seller concessions from 6%-3%. FHA will publish this proposal in the federal register with a 30-day time period for public comment. NAR plans to argue against this decrease. Especially as closing costs differ greatly among states, and fees on services (such as appraisals) are increasing, seller concessions can be a vital part of the transaction, helping buyers at the closing table. The testimony also urged passage of legislation to make the loan limits permanent, and urged changes to FHA's condo policy.

Read the full testimony