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In This Issue
Broadband Access
FCC Approves Reforms to Boost Broadband Access
FHA Programs (Federal Housing Administration)
NAR Supports Greater Liquidity for Rural Communities
Government - Sponsored Enterprises
Obama Administration Expands GSE Refi Program
Broadband Access
FCC Approves Reforms to Boost Broadband Access
On October 27, the Federal Communications Commission (FCC) approved major reforms to the Universal Service Fund (USF) intended to speed the deployment of high-speed internet service to rural areas. The USF is funded by long distance phone customers that has historically been used to provide wireline telephone service to rual areas. Now that fund will used to subsidize the cost of providing broadband internet service in areas where absent such support, broadband would not be available.
Realtors® support policies to encourage the growth of strong viable communities. These changes to the USF will promote economic growth and expand opportunities for home sales. A recent study concluded that in communities where there is access to high speed internet, property values are 6% higher. Communities prosper when they gain access to high-speed Internet. Property values increase, businesses grow and jobs are created. Broadband forms the infrastructure for the American economy’s digital future. Affordable high-speed broadband will soon become almost as important as water and electricity, and the absence of broadband makes a community a less attractive location for new investment and development. Furthermore, availability of “new economy” jobs is impossible in a community with little or no broadband access.
NAR supports the following Broadband Access Principles:
- Every American should have access to a high-speed, world-class communications infrastructure
- High-capacity broadband connectivity should be affordable and widely accessible
- A variety of options should be considered to encourage quality broadband deployment and adoption including action by the public and private sector.
Melanie Wyne, 202-383-1234
Samuel Whitfield, 202-383-1131
FHA Programs (Federal Housing Administration)
NAR Supports Greater Liquidity for Rural Communities
This week, the National Association of Realtors (NAR) President Ron Phipps submitted comments on a proposed rule that would enable direct lending institutions of the Farm Credit System to seek approval in the Federal Housing Administration (FHA) mortgage insurance programs. The Farm Credit System is a federally chartered network of borrower-owned lending institutions composed of cooperatives and related organizations. Currently, regulations do not provide for FHA approval of these lending institutions.
Enhancing the availability of FHA mortgage insurance programs in rural areas may help the recovery of our housing markets. NAR believes that allowing these lending institutions to participate in the FHA mortgage insurance programs will result in greater liquidity for many rural communities. NAR also supports the proposed rule’s language that eligibility for direct lending institutions of the Farm Credit System for participation in FHA mortgage insurance programs would be based on the same eligibility requirements as other participants.
Jerome Nagy, 202-383-1233
Megan Booth, 202-383-1222
Government - Sponsored Enterprises
Obama Administration Expands GSE Refi Program
On October 24, 2011, President Obama and the Federal Housing Finance Agency (FHFA) announced enhancements to the Home Affordable Refinance Program (HARP) to give more “under water” borrowers an opportunity to refinance their loans. Under HARP, almost 900,000 borrowers have refinanced their mortgages to take advantage of lower rates, but this number is far short of the original estimates. The revised program, known as HARP 2, continues to be available only for borrowers with loans backed by Fannie Mae or Freddie Mac (the government sponsored enterprises, or GSEs) that were sold to the companies by May 31, 2009. HARP 2 eliminates the 125% loan-to-value ratio cap. It also reduces risk-based fees for borrowers and eliminates these fees altogether if they refinance into a shorter term mortgage. To be eligible, borrowers may not have made a late mortgage payment in the last six months or made more than one late payment in the last 12 months. As under the original HARP program, the current loan-to-value ratio must exceed 80%. Borrowers with a Fannie or Freddie loan may contact their existing lender or any other mortgage lender that agrees to handle a HARP 2 refinancing. More details are expected by November 15, 2011, and implementation of the program will occur over the coming months.
Jeff Lischer, 202-383-1117
Charles Dawson, 202-383-7522
Tony Hutchinson, 202-383-1120