Treasury Reserves OK for Stimulus With FHA Reform

American Banker (01/29/08) P. 20; Kaper, Stacy
The White House surprised many on Monday by suddenly withdrawing its support for the inclusion of FHA reforms in President Bush's proposed economic stimulus package. Bush had previously made several personal pleas to Capitol Hill legislators on the importance of passing the bill, which would allow the FHA to insure more loans. Attaching the provisions to his economic stimulus plan had been viewed as a mostly innocuous move on the way to quick enactment. Among the provisions in jeopardy is one that would relax down-payment requirements and one that would temporarily raise the conforming-loan limit, thus give Fannie Mae and Freddie Mac a chunk of the jumbo loan market. A Treasury spokesperson said the department prefers that Congress address FHA reform as a separate issue from the economic stimulus package.