WASHINGTON, July 11 –The Senate late this afternoon approved legislation to help hard-pressed homeowners cope with a worsening mortgage crisis. The vote was 63 to 5.
The measure includes a proposal – long championed by Senator Bernie Sanders – to create an Affordable Housing Trust Fund. Another provision added by Senators Patrick Leahy and Sanders would steer $20 million to Vermont communities. A Sanders proposal to help disabled veterans retrofit their homes also is part of the package.
As a member of the House of Representatives, Sanders in 2001 first proposed creation of a trust fund to help build affordable homes and rental housing. The measure the Senate passed today would create a separate account at the Treasury Department that could be used only to build, repair or rehabilitate affordable rental units and assist first-time homebuyers. The funds would be distributed to states and local communities.
“I am delighted that the Affordable Housing Trust Fund was included in this major housing bill,” Sanders said. “This is legislation that I introduced seven years ago, so it has been a long journey. At the end of the day, however, this provision will play a significant role in building affordable housing for low- and moderate-income people, as well as the disabled.”
The sweeping legislation, which now goes back to the House, also would help communities ease the harmful effects of foreclosures and delinquencies. Under the provision by Leahy and Sanders, Vermont would receive almost $20 million of $3.92 billion in supplemental Community Development Block Grants. “Vermont cities and towns will be able to provide immediate assistance to the struggling middle class trying to hold onto their homes and improve communities hit hard by foreclosures,” Sanders said.
Another $57 million is allotted nationwide for federal grants to help disabled veterans adapt their homes. “With so many soldiers coming back from Iraq and Afghanistan with disabilities, it is absolutely imperative that we make sure they have as normal a life as possible and that certainly includes adapting their homes to meet their needs,” Sanders said of the provision he offered.
The measure also would let the Federal Housing Administration back $300 billion in new, cheaper home loans for about 400,000 borrowers otherwise considered too risky to qualify for government-insured, fixed-rate loans. Borrowers would be eligible for the housing rescue if their mortgage holders were willing to take a loss and allow them to refinance. They also would have to demonstrate an ability to make payments on a new loan. Ultimately, the government would be entitled to a share of any profits made from selling or refinancing their properties. In addition, the measure would provide $14.5 billion in tax breaks, including a credit of up to $8,000 for first-time homebuyers. It also puts a new regulator in charge of overseeing Fannie Mae and Freddie Mac.
