In recent testimony before the House Financial Services Subcommittee on International Monetary Policy and Trade Without, experts from the housing industry warned that without government involvement, such as through entities like Freddie Mac and Fannie Mae, homeownership would become available only to the country’s wealthiest citizens.

Moe Veissi, president-elect of the National Association of Realtors (NAR) told Congressional leaders that the current financial model for homeownership needs to be fixed so that middle class and lower income consumers are not frozen out of buying a house. “We must be better stewards of the U.S. housing finance system if it is to thrive and effectively serve American home buyers and mortgage investors into the future,” Veissi stressed.

Among the options available to Congress is the Secondary Market Facility for Residential Mortgage Act of 2011, which was presented by United States Representatives Gary Miller (R-Calif) and Carolyn McCarthy (D-NY.)

The proposed bill is an effort to reform the secondary mortgage market by ensuring long-term fixed-rate mortgages will remain an option, and to make sure home loans are easier to get for qualified consumers, whether they are looking to buy a resale home in South Carolina or a new home in Texas. The bill also guarantees federal government involvement and oversight. The concern for many in and out of the housing market is that if the industry is fully privatized, banks will eliminate traditional options such as the 30-year fixed-rate mortgage. Whereas the government’s interest has been supporting homeownership for people of all economic levels because it strengthens communities, brings in local tax revenue, and improves the overall economy, banks are only interested in minimizing risk and maximizing profits. Left to themselves, they would simple want to deal with the richest of Americans when giving out home loans.

An NAR survey found that many new home buyers are being saddled with significantly higher down payments and substantially higher interest rates. That’s why prospective homeowners are turning to LGI Homes, which offer qualified buyers no money down financing. In addition to all the amenities offered by an LGI Homes community, in many cases the mortgage payment is less than typical monthly rents.

So for those interested in gaining the benefits of homeownership, there are still good deals to be had, despite the restrictive lending environment.

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