FOR IMMEDIATE RELEASE 
September 25, 2003
Contact:  Marie DesOrmeaux
(202) 225-3772
 
Ross Speaks on Behalf of Fannie Mae
Cites positive work in meeting 4th district housing needs
 
(Washington, D.C.) Fourth District Rep. Mike Ross (D-Ark.) submitted the following statement on Thursday during the House Financial Services Committee’s hearing on H.R. 2575, which provides for regulatory oversight of the government sponsored enterprises Fannie Mae and Freddie Mac.  During the 2003 August District Work Period, Ross held a number of roundtable meetings with Fannie Mae and other housing industry professionals to discuss the unique housing needs of the Fourth District.

“Mr. Chairman, I look forward to working with you, Ranking Member Frank and my colleagues on this Committee to create bipartisan legislation that will revise the safety and soundness regulation of Fannie Mae and Freddie Mac.  But I am hopeful, Mr. Chairman, that as legislation is drafted and marked up in this Committee, we are careful not to alter in any way Fannie Mae’s ability to carry out its housing mission.   

“We have in place now a process under which Fannie Mae can exercise broad authority to develop new products under the general requirement that only entire new programs must go to HUD for program approval.  This current process has served my rural district in Arkansas well, and I will provide examples. 

“Recently, Fannie Mae worked with our South Arkansas Community Development to make it possible for disabled individuals with live-in service providers to become homeowners.  Our local CDC worked on this effort for over a year, only to be turned down by other potential lending partners.   

“This same CDC has an Individual Development Account that encourages consumer saving by providing a four-to-one match for funds saved, up to $660.  Fannie Mae allows those matching funds, which could total just over $2,600 from South Arkansas Community Development, to be used as eligible funds for the down payment and/or closing costs on the purchase of a home.  

“And finally, South Arkansas Community Development is currently planning to build 50 homes for low and very low-income borrowers.  The borrowers will actually provide some of the manual labor to build their new homes.  A portion of that labor, known as “sweat” equity, can be considered by Fannie Mae as an acceptable source of funds for the down payment, closing costs, or financial reserves, thus reducing the total amount of funds required from the borrower to close on the homes.  I applaud this type of innovation, and will not be able to support legislation that undermines it. 

“Two weeks ago, the Administration proposed moving the safety and soundness regulation of the GSEs to the Treasury Department.  I hope these changes can be made in a manner that we can maintain confidence in the housing markets and allow the engine of housing finance to continue running.”


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