WASHINGTON — The House Financial Services Committee has passed two important pieces of legislation for housing and insurance.

It passed the National Affordable Housing Trust Fund Act of 2007 (H.R. 2895) last week by a vote of 45 to 23.

“The National Affordable Housing Trust Fund is a critical step forward toward a historic moment in affordable housing. As the affordable housing crisis in this country continues to worsen after years of neglect, we must move quickly to get the federal government back in the affordable housing production business,” Housing and Community Opportunity Subcommittee Chairwoman Maxine Waters (D-Calif.) said.

“The growing shortage of affordable housing is one of the most serious social and economic problems facing our country. Given our severely constrained fiscal realities, we are today doing the best we can to address this–creating a low income housing trust fund that will be paid for in ways that do not draw from federal tax revenues,” added Committee Chairman Barney Frank (D-Mass.).

According to a committee statement, the fund would represent the largest expansion in federal housing programs in decades, with a goal of producing, rehabilitating and preserving 1.5 million housing units over the next 10 years. As amended, it will initially allocate between $800 million and $1 billion annually directly to states and local communities, without increasing government spending or the federal deficit; funding would come from other proposed legislation, including the GSE Affordable Housing Fund (H.R. 1427), FHA savings that result from the enactment of the Expanding American Homeownership Act (HR 1852), and any other sources of funds subsequently identified.

The committee also recently approved H.R. 3121, The Flood Insurance Reform and Modernization Act of 2007, which provides updated coverage following Hurricane Katrina.

According to a committee statement, the bill will ensure the program's continued viability by encouraging broader participation, increasing accountability, eliminating unnecessary federal subsidies and updating the flood insurance program. The bill also includes wind damage provisions, sponsored by Congressman Gene Taylor (D-Miss.), that one credit union lobbyist characterized as controversial.

“We have taken the necessary steps to reform a needed program for homeowners, and we have responsibly expanded the program to cover wind related damages from major weather events,” House Financial Services Committee Chairman Barney Frank (D-Mass.) commented.

H.R. 3121 requires greater accountability and financial responsibility at the National Flood Insurance Program; makes the updating and modernization of flood maps an ongoing process, and increases funding for mapping; clarifies flood insurance disclosures for consumers; provides for an appeals process for when consumers have to have insurance when new flood zone maps are issued; allows for premiums increases of up to 15% compared to the current 10% a year; and increases the NFIP's borrowing authority, among other things. The bill reauthorizes the program for five years.

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Affordable Housing Trust, Flood Insurance Reform Pass House Committee

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