In a big win for real estate, Congress last week approved a $305 billion transportation bill that includes no funding from an extension of mortgage guarantee fees as some lawmakers had proposed.
The bill provides reauthorization of several initiatives that the National Association of REALTORS® supports, including programs to increase transportation safety and develop more pedestrian-friendly communities. But the big victory for real estate was that the bill excluded so-called g-fees to pay for transportation programs.
More than a fifth of REALTORS® across the country, or about 197,000 members, participated in a Call for Action that NAR launched in October to prevent Congress from using g-fees at the expense of future home owners. Some 600,000 letters in all were sent in what was REALTORS®’ most forceful response to a Call for Action. President Obama signed the bill on Friday.
Since last summer, NAR has been arguing that proposals to use g-fee income from the two secondary mortgage market companies, Fannie Mae and Freddie Mac, to help cover costs of the bill would set a bad precedent and hurt home buyers’ ability to obtain affordable mortgage financing.
“G-fees are a critical risk management tool used by Fannie Mae and Freddie Mac to protect against losses from loans that default,” NAR said last month in a joint letter with other industry organizations to Congressional leaders. “Increasing g-fees for other purposes imposes an unjustified burden on the housing finance system.”
Fannie and Freddie charge the fees to lenders to help cover their credit risks in return for guaranteeing conventional home mortgage loans originated by the lenders. NAR President Tom Salomone says Congress’ decision not to include the fees in the bill will help prevent mortgage costs from rising, particularly for borrowers who would find any increase in costs a steep burden.
“This legislation recognizes the value of home ownership and the need to protect future homeowners from unnecessary costs,” Salomone said last week. “NAR applauds the conference committee for standing with the home owners of today and tomorrow.”