The US Senate Committee on Banking, Housing, and Urban Affairs Chair Tim Johnson (D-SD) and Ranking Member Mike Crapo (R-ID) recently released the text of their bipartisan housing finance reform bill. The bill provides for potentially at least $3.5 billion a year for the National Housing Trust Fund (NHTF). The Johnson-Crapo bill is built on the framework of S. 1217, the Corker-Warner bill (see Memo to Members, 6/28), but is more favorable to the NHTF than the earlier bill.

Johnson-Crapo would increase the small state minimum for the distribution of NHTF to be the greater of $10,000,000 or 1% of the NHTF allocation. The exception is if the initial capitalization to the NHTF is less than $1 billion, in which case the small state minimum would be the greater of $5,000,000 or 1% of the NHTF allocation. This is an increase from the current small state minimum of $3,000,000. NH is a small-state minimum state.

The Johnson-Crapo bill would wind down Fannie Mae and Freddie Mac and create a new Federal Mortgage Insurance Corporation (FMIC) to regulate the secondary mortgage market, similar to the way the FDIC regulates banks.