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September 19, 2000
(House)

H.R. 5193 - FHA Downpayment Simplification Extension Act of 2000
(Rep. Lazio (R) NY)

The Administration has no objection to House passage of H.R. 5193, which would provide a 15-day extension of the Federal Housing Administration (FHA) downpayment simplification provision that is scheduled to expire on September 30, 2000. This provision allows for a simplified method of calculating the downpayments that must be made by new homeowners buying a home with an FHA insured mortgage loan. It has made FHA loan products easier to use and understand by realtors, lenders, and borrowers.

The Administration strongly supports a permanent extension of this successful program management tool, as requested in the President's FY 2001 Budget. The Administration was very disappointed to see that the Senate Appropriations Committee removed this provision from the FY 2001 VA, HUD, and Independent Agencies Appropriations bill as reported on September 13, 2000. Without the permanent extension of the FHA downpayment simplification provision, 7,000 lenders will have to change their processes and may no longer offer FHA products.