Rep. Vargas Introduces Promoting Access to Credit for Homebuyers Act for Low to Middle-Income Individuals
WASHINGTON, D.C. (January 28, 2021) Today, Rep. Juan Vargas (CA-51) introduced the Promoting Access to Credit for Homebuyers Act to help low to middle-income individuals access mortgage credit throughout the pandemic.
The current economic environment has caused multiple homeowners to request forbearance on their mortgages. The legislation would require Fannie Mae, Freddie Mac, and the Federal Housing Administration (FHA) not to take into account borrowers’ forbearance requests or inquiries during this period of hardship when evaluating eligibility for a government-backed loan.
“Low and middle-income families have been the most affected during the pandemic. I introduced the Promoting Access to Credit for Homebuyers Act to help families keep their homes and facilitate homebuyers' access to credit during this difficult time," said Rep. Vargas.
The CARES Act requires servicers to offer forbearance for federally backed loans for borrowers undergoing financial hardship. Current regulations, however, are restricting access to affordable mortgages for borrowers who have sought to take advantage of these CARES Act provisions.
“Americans have the right to access the relief offered to them in the CARES Act,” said Rep. Vargas. “Without this bill, borrowers who inquired about, requested, or received a forbearance through relief provided in the CARES Act may not be able to secure affordable mortgages."
Rep. Vargas’ bill will also effectively allow lenders to continue lending to low to middle-income homebuyers without the fear of losing money. In doing so, the bill prevents increased credit tightening among servicers, which could negatively impact an already weak economy.
"FHA, Fannie, and Freddie are set up to support lending to low and middle-income individuals, and yet, their regulations have not been adjusted to make this possible," said Rep. Vargas. "Too many Americans are struggling to make ends meet. They need the option to pause their mortgage payments during the pandemic without fear of it affecting their mortgage’s affordability."
Vargas represents California’s 51st Congressional District which includes the southern portion of San Diego County, all of Imperial County, and California’s entire U.S.-Mexico border. Vargas was first elected to the U.S. House of Representatives in 2012 and is currently serving his fifth term in Congress.
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