May 3, 2006


The Honorable Bob Ney, Chairman
Financial Services Subcommittee on
Housing and Community Opportunity
Washington, D.C. 20515

The Honorable Maxine Waters, Ranking Member
Financial Services Subcommittee on
Housing and Community Opportunity
Washington, D.C. 20515

Dear Chairman Ney and Ranking Member Waters:

On behalf of the National Housing Conference (NHC), I am writing to urge legislative reforms for the Federal Housing Administration (FHA) to better reach underserved borrowers.

The National Housing Conference is a nonprofit 501(c) (3) membership association dedicated to advancing affordable housing and community development causes. A membership drawn from every industry segment forms the foundation for NHC’s broad, nonpartisan advocacy for national policies and legislation that promote suitable housing in a safe, decent environment across the nation.

FHA is one of the various mechanisms created by the federal government to ensure continuous access to affordable credit. FHA plays a vital role in opening to the door of homeownership and affordable rental housing to Americans and it has the potential to assist even more Americans, particularly those who otherwise have no affordable alternative for financing a home.

Despite FHA’s potential, its current structure hinders the program’s ability to reach underserved populations. The current statutory framework of FHA is antiquated and does not allow it to meet needs of consumers in today’s constantly changing mortgage market.

NHC believes that FHA should be improved to integrate private sector efficiencies, allowing it to match products and programs to meet the needs of homebuyers and renters today and in the future. To accomplish this, NHC urges the follow reforms to FHA:

• Flexible authority to introduce new products and program changes, such as flexible downpayment program and raising FHA loan limits to the levels in high cost areas;

• The ability to directly invest a portion of its revenues into technology improvements to improve management of its portfolio, gain efficiencies and lower operating costs; and

• Greater control in managing its human resources to attract and manage talented and knowledgeable industry professions.

We believe the vitality of FHA is critical in maintaining the program as an important tool in providing access to homeownership and affordable rental housing. Reforming FHA will ensure that it remains a relevant tool in providing access to homeownership for Americans.


Sincerely,

Conrad E. Egan
President and CEO