This week, Congressman Howard “Buck” McKeon (R-CA 25) and Congressman Scott Peters (D- CA 52) introduced H.R. 1997, the Communities Achieving Sustainability Act (CASA). CASA Authorizes the Housing Urban Development (HUD) to make 203k loans to small investors for a 2-year period. This legislation will help revitalize communities (especially those hurt most by the recent foreclosure crisis), increase property values and create economic growth in the housing market.
I, personally think it’s time to bring the investor back. What is the likelihood the bill will pass into law?
According to Govtrack.us, more than 10,000 bills will be considered by each Congress. About 4% will become law. Congressmen and senators, their staff, and lobbyists all know what bills are important because they have the institutional knowledge of what makes a bill important. Only 11% of House bills made it past committee and only 3% were enacted in 2011–2013. [methodology]
This Bill’s Scorecard?
- 6% chance of getting past committee.
- 1% chance of being enacted.
Here’s the bill’s language as introduced. On 5/15/2013 it was referred to the House Committee on Financial Services.
To allow investor participation in the loan rehabilitation program authorized under section 203(k) of the National Housing Act.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
- This Act may be cited as the `Communities Achieving Sustainability Act’.
SEC. 2. INVESTOR PARTICIPATION IN FHA REHABILITATION PROGRAM.
- (a) Investor Participation-
- (1) IN GENERAL- The Secretary shall, upon application by a mortgagee and approval of such application by the Secretary, insure and make commitments to insure rehabilitation loans (including advances made during rehabilitation) which are eligible for insurance under section 203(k) of the National Housing Act (12 U.S.C. 1709) made by financial institutions in order to assist in the rehabilitation of 1- to 4-family structures used primarily for residential purposes.
- (2) ELIGIBLE MORTGAGORS- Notwithstanding any other provision of law or regulation, such rehabilitation loans insured pursuant to this Act shall involve a mortgagor who is an investor.
- (b) Terms and Conditions- Such commitments to insure and such insurance shall be made upon such terms and conditions which the Secretary may prescribe pursuant to this Act and which are consistent with the provisions of subsections (b), (c), (e), (i), (j), and (k) of section 203 of the National Housing Act (12 U.S.C. 1709 (b), (c), (e), (i), (j), and (k)), except as modified by the provisions of this Act.
- (c) Maximum Loan Commitment- To be eligible for insurance under this Act, a mortgage shall not exceed 90 percent of the appraised value of the 1- to 4-family structure subject to such mortgage.
- (d) Calendar Year Limitation- The Secretary may insure, or enter into a commitment to insure, up to four 1- to 4-family structures for an investor described in subsection (a)(2) during a calendar year.
- (e) Mortgage Premium- The single premium payment required under section 203(k)(2)(A) of the National Housing Act (12 U.S.C. 1709(k)(2)(A)) shall be increased by 10 basis points for any mortgage insured pursuant to this Act.
- (f) Definitions- In this Act:
- (1) INVESTOR-
- (A) IN GENERAL- The term `investor’ means a person who–
- (i) obtains a rehabilitation loan for a structure described in subsection (a)(1) for the purpose of appreciation or production of income with respect to such structure; and
- (ii) does not intend on occupying such structure.
- (B) PERSON DEFINED- As used in this subparagraph, the term `person’ has the meaning given such term in section 551(2) of title 5, United States Code.
- (2) MORTGAGEE; MORTGAGOR; MORTGAGE- The terms `mortgagee’, `mortgagor’, and `mortgage’ have the same meanings as given such terms in section 201 of the National Housing Act (12 U.S.C. 1707).
SEC. 3. SUNSET PROVISION.
- The provisions of this Act shall terminate on the date that is 2 years following the date of the enactment of this Act and the Secretary shall not approve any application described in section 2(a)(1) submitted after the conclusion of such 2-year period.
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