Ne Colorado News

WASHINGTON – Congresswoman Yadira Caraveo, M.D. (CO-08) on June 23 voted against H.R. 3564 – which would cancel Federal Housing Finance Agency (FHFA) policy that supports creditworthy first time, working class homebuyers in favor of wealthy investors and those purchasing second homes. While record housing prices have put homeownership increasingly out of reach for many Coloradans, the so-called Middle Class Borrower Protection Act would actually make mortgages more expensive for many middle class families.

“The cost of housing has roughly doubled over just the past ten years. It's squeezing hardworking families and driving the affordability crisis in Colorado,” said Congresswoman Caraveo. “I came to Congress to protect these families, which is why I voted against H.R. 3564. This bill would force creditworthy first-time homebuyers and borrowers to pay even more for mortgages, likely pricing them entirely out of the market.”

“As we address the cost of housing in Colorado, we should not be giving preference to investors and wealthier borrowers who are purchasing second homes; we should be supporting working class families,” Caraveo continued.

Specifically, this bill directs the Federal Housing Finance Agency (FHFA) to revise the single-family pricing framework charged by enterprises to the framework in effect before May 1, 2023, undoing the updates to the Loan Level Price Adjustment (LLPA) matrix.

Under the current policy framework, which Speaker McCarthy is attempting to repeal, these first time borrowers see reduced or eliminated loan level price adjustment fees. The FHFA has also increased loan level price adjustment fees for vacation home and investment property mortgages, cash-out refinances, and large loan amounts. Taken together, these actions have been an important first step towards a more equitable mortgage pricing framework that supports middle class homebuyers over investors and second-home owners.

The median home sales price is currently $549,807 in Colorado. That's a 34% increase just since 2020, when the median in Colorado was $410,720. However, Americans have not become 34 percent richer in the last three years. Inflation, rising demand, and the increasing amount of homes owned by private equity and Wall Street firms have all contributed to these price increases. Meanwhile, rising rents make it increasingly difficult for first-time home buyers to save for a down payment. To afford a 20 percent down payment on a $549,807 home, a homebuyer would need $109,961 for the down payment, a sum that many middle-income American families simply do not have.

Given these trends, we should support FHFA policies that make mortgages more affordable for first-time homebuyers, borrowers participating in the Enterprises’ affordable mortgage programs, and creditworthy borrowers who lack a 20 percent down payment – not repealing them.

See the full text of the legislation here.

Original source can be found here