American Housing Rescue & Foreclosure Prevention Act (HR 3221)

Dear Beryl:

Earlier today, Congress passed comprehensive legislation that will strengthen our housing market and help American families avoid foreclosure. I strongly support this legislation, and I am writing to update you on my work to address the downturn in our housing market.

Turmoil in our country's subprime mortgage market is hurting our economy and putting millions of families at risk of losing their homes. That is why Congress has passed the American Housing Rescue & Foreclosure Prevention Act (HR 3221).

If this bill becomes law, it will create new tax credits and make changes to the Federal Housing Administration (FHA), Fannie Mae and Freddie Mac to help American families avoid foreclosure and achieve home ownership.

The centerpiece of HR 3221 is the creation of a new program that will allow the FHA to refinance mortgages for homeowners facing foreclosure. Under the terms of the program, homeowners can refinance their mortgage with the FHA if their lender agrees to reduce their mortgage principal by at least 15%. In order to ensure that this program is not abused, the government will recoup a portion of the profits that the homeowner makes when they resell their home for a higher price in the future. I am confident that this will help Americans keep their homes and pay off mortgages they can actually afford.

HR 3221 will also strengthen the housing market by creating a refundable tax credit of up to $7,500 for first-time homebuyers and temporarily increasing the low-income housing tax credit. These changes to our tax code will help make the dream of home ownership a reality for millions of American families, including low-income families seeking affordable housing options.
Additionally, HR 3221 includes other commonsense housing reform measures, such as:

-Strengthening regulation of Fannie Mae, Freddie Mac and the Federal Home Loan Bank;
-Permanently increasing the FHA loan limit to help families in high-cost housing areas;
-Expanding access to reverse mortgages through the FHA; and
-Increasing the Veterans Administration home loan limit to make it easier for veterans to achieve home ownership.

HR 3221 passed the House of Representatives on May 8th. Members of the House and Senate will now meet to develop a final version of comprehensive housing legislation to send to the President.

Please be assured that I will continue to work with my colleagues to address the subprime mortgage crisis and help Americans achieve home ownership. Please contact me in the future about issues that are important to you.

Sincerely,

Rick Larsen
United States Representative
Washington State, 2nd District