Frank to Introduce Two Housing Bills This Week

Posted April 15, 2008 at 1:49pm

House Financial Services Chairman Barney Frank (D-Mass.) intends to unveil his $300 billion housing stimulus package on Thursday.

But one of its more controversial provisions will be carved out and introduced as a separate bill on Wednesday, according to a senior House Democratic aide.

Frank’s sweeping housing proposal would allow the Federal Housing Administration to guarantee up to $300 billion in refinanced mortgages that have been significantly written down by mortgage holders and lenders. The FHA guarantee would make the restructured loans more attractive in the secondary market.

The separate, smaller bill will focus exclusively on providing $10 billion in loans and grants to states to purchase and rehabilitate foreclosed homes, a provision that has been opposed by Republicans.

Both bills will be marked up next week, said the Democratic aide. From there, they will head to the floor in the last week of April, where they will be debated along with a housing tax credit bill put forward by House Ways and Means Chairman Charlie Rangel (D-N.Y.).

Rangel’s bill, which passed the committee last week with broad bipartisan support, would provide tax credits to first-time homebuyers, improve access to low-income housing and allow families to deduct property taxes, among other provisions.

It has not yet been decided how the three bills will be debated on the floor, said the aide. They may be taken up individually or Rangel’s tax bill may end up being rolled into Frank’s housing package.

The combined bills represent a first step toward the House’s effort to produce an economic stimulus package for the housing sector.

The Senate overwhelmingly passed its own housing stimulus package last week, though it was opposed by the Bush administration. Unresolved issues that await lawmakers in conference include differences in tax language and a sense that the Senate is not as intent on sticking to budget-neutral pay-as-you-go rules.