One idea is for the GSEs, FHA and the Federal Home Loan Banks to buy storm-damaged homes from low-income owners and make them available to other low-income "homesteaders" under President Bush's proposed urban homesteading program. The original owner could use the buy-out money, together with perhaps a Section 8 housing voucher, to rebuild, relocate or use as a down payment.
Congress should also explore ways to boost organizations like Habitat for Humanity, which offer cost-effective ways to provide affordable homeownership opportunities for the most needy in our society. Habitat has built more than 200,000 homes with volunteer labor using 20-year no-interest loans, and is hard at work building homes for storm victims. My hope would be to allow the secondary market to purchase or guarantee mortgages made by Habitat for Humanity in states affected by Hurricane Katrina.
House Financial Services Committee Chairman Mike Oxley, R-Ohio, recognizes how organizations such as Habitat can play a prominent role in rebuilding communities. His committee overwhelmingly passed H.R. 1461, a bill that would enhance development in the Gulf region and elsewhere, while creating an independent, strong regulator for the GSEs.
H.R. 1461 offers a prudent approach, because it empowers the regulator, and not Congress, to determine how Fannie and Freddie take on risk. The Senate bill, in contrast, would arbitrarily force financially sound private companies to divest the bulk of their assets, hardly an approach that is in keeping with Republican economic philosophies. It would be a grave mistake to fundamentally restructure a housing finance system that today is helping drive the nation's economic growth.
In its upcoming floor vote, I strongly encourage the full House to follow in the committee's footsteps by giving the bill its strong support. Housing and homeownership transcends partisanship, not the other way around.