Legislation has been introduced that will empower the Federal Housing Administration (FHA) to become a more efficient provider of financing for affordable homeownership and rental housing. The proposed law -- S. 3173, The 21st Century Housing Act -- proposes significant changes to the National Housing Act, which governs how FHA operates.

As mortgage bankers, we look to programs like the FHA to help us provide even more options to consumers and help bridge the affordability gap faced by many first-time buyers, and minority and low- and moderate-income families, said Regina M. Lowrie, chairperson of Mortgage Bankers Association. S. 3173 will make the changes necessary to ensure that FHA continues its good work in partnership with the mortgage lending community to achieve our joint goal of providing affordable housing and financing. Key provisions of the bill include the following:

Elimination of the minimum cash investment required by the borrower, which would allow FHA to offer a zero downpayment product.
Authorization to use FHA revenues above a certain threshold for investment in improving FHA's technology.
Greater flexibility in personnel compensation in order to attract highly qualified staff.
Increases in multifamily loan limits to expand affordable rental housing production in high cost areas.