The Mortgage Bankers Association asked Congress to pass a Department of Housing and Urban Development spending bill and avoid a stalemate that could undermine a still fragile housing recovery.

A House subcommittee passed a HUD budget roughly $1.9 billion below what the administration asked for in February. The White House threatened to veto the bill unless some funding was replaced, including more money for housing counselors and rental programs.

The House of Representatives will consider the bill this week. The bill does provide the requested $25 billion in Federal Housing Administration commitment authority for government-backed loans for multifamily and healthcare properties.

“We remain concerned, however, about HUD’s proposal to increase the mortgage insurance premiums for multifamily and healthcare programs. This proposed increase should not be implemented unless there is data to justify it,” wrote William Killmer, senior vice president of political affairs at the MBA,  in a letter to key House committee lawmakers.

Killmer also said lawmakers should fully fund the $55 million in housing counselor funds HUD requested, which is more than the $45 million the bill allows.

When lawmakers quarreled over spending cuts last year, the FHA and other HUD agencies were threatened with a shut down. HUD is also contending with an FHA emergency fund, which approached the need for a bailout earlier in the year.

HUD must find a way to mitigate risk and pad the fund with extra cash, while avoiding increased premiums the mortgage bankers stand against. HUD raised insurance premiums in April, but the MBA urged lawmakers to reject further raises.

“The House should also oppose any amendments that raise FHA downpayment requirements or lower loan limits — or any other proposals that would harm our nation’s nascent economic recovery by unnecessarily restricting access to affordable mortgage credit,” Killmer wrote.


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