II 

117TH CONGRESS 

1ST SESSION S. 2131 

To require a review of the effects of FHA mortgage insurance policies, 

practices, and products on small-dollar mortgage lending, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

JUNE 17, 2021 

Mr. TESTER (for himself and Ms. LUMMIS) introduced the following bill; 

which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs 

A BILL 

To require a review of the effects of FHA mortgage insurance policies, practices, and products on small-dollar 

mortgage lending, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Improving FHA Sup5 port for Small-Dollar Mortgages Act of 2021’’. 

6 SEC. 2. REVIEW OF FHA SMALL-DOLLAR MORTGAGE PRAC7 TICES. 

8 (a) CONGRESSIONAL FINDINGS.—The Congress finds 

9 that— 


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1 (1) affordable homeownership opportunities are 

2 being hindered due to the lack of financing available 

3 for home purchases under $100,000; 

4 (2) according to the Urban Institute, small-dol5 lar mortgage loan applications in 2019 were signifi6 cantly more likely to be denied by lenders than large 

7 mortgage loans, and this difference in denial rates 

8 cannot be fully explained by differences in the appli9 cants’ credit profiles; 

10 (3) according to data compiled by Attom Data 

11 solutions, mortgage originations for loans of $70,000 

12 or less have decreased 38 percent since 2009, while 

13 there has been a 65-percent increase in origination 

14 of mortgages for more than $150,000; 

15 (4) the mission of the Federal Housing Admin16 istration (referred to in this section as the ‘‘FHA’’) 

17 is to serve creditworthy borrowers who are under18 served and disproportionately serve borrowers with 

19 lower incomes, but, according to the Urban Insti20 tute, the FHA serves a smaller share of borrowers 

21 seeking small-dollar mortgage loans than borrowers 

22 seeking larger loans at every income level; and 

23 (5) the causes behind these variations are not 

24 fully understood but merit study that could assist in 

25 furthering the Department of Housing and Urban 


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1 Development’s mission, including meeting the hous2 ing needs of borrowers the program is designed to 

3 serve and reducing barriers to homeownership, while 

4 protecting the solvency of the Mutual Mortgage In5 surance Fund. 

6 (b) REVIEW.—The Secretary of Housing and Urban 

7 Development (referred to in this section as the ‘‘Sec8 retary’’) shall conduct a review of its FHA single-family 

9 mortgage insurance policies, practices, and products to 

10 identify any barriers or impediments to supporting, facili11 tating, and making available mortgage insurance for mort12 gages having an original principal obligation of $100,000 

13 or less. Not later than the expiration of the 12-month pe14 riod beginning on the date of the enactment of this Act, 

15 the Secretary shall submit a report to the Congress de16 scribing the findings of such review and the actions that 

17 the Secretary will take, without adversely affecting the sol18 vency of the Mutual Mortgage Insurance Fund. 

Æ 


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