Trump ‘will not sign’ housing bill — but that may not matter
If the president takes no action on the ROAD to Housing Act by midnight, it becomes law. Plus, FHA requirements raise concerns; Fed appoints task force leaders.
Key points:
- President Donald Trump is refusing to sign the bipartisan housing bill Congress passed last month. It is slated to become law without his signature at midnight.
- The Consumer Federation of America highlighted “widespread misunderstandings” about the FHA’s minimum property requirements in a recent letter to HUD.
- Fed Chair Kevin Warsh has announced the leaders of five task forces he introduced last month intended “to ensure the Fed is best positioned to achieve our objectives.”
The housing bill that real estate industry advocates have described as the federal government's biggest move on housing in decades is poised to become law in the coming hours — so long as the president does not veto it.
Elsewhere in Washington, D.C., a consumer advocacy group is calling on the Federal Housing Agency (FHA) to make some of its requirements for borrowers easier to understand, and the Federal Reserve has announced who will be spearheading its five new task forces.
Housing bill may become law at stroke of midnight
After months of political wrangling in Congress, the 21st Century ROAD to Housing Act is finally poised to become law at midnight.
The popular bipartisan housing package passed by large margins in the House and Senate last month. But after President Donald Trump unexpectedly canceled a scheduled signing ceremony, many politicians and industry advocates grew concerned that it might not become law after all.
When the House speaker officially sent the legislation to the White House, a 10-day clock began ticking down for the president's decision. On Friday morning, Trump said in a social media post that he "will not sign" the bill "in PROTEST" of the lack of momentum on an unrelated, controversial voter ID bill he wants passed.
The housing bill can still become law without Trump's signature. If he decides to veto it in the final hours before that occurs, the legislation would be returned to Congress.
Several of the bill's supporters — including the National Association of Realtors and the National Association of Home Builders — reiterated their backing in statements this week.
"This legislation recognizes that increasing housing supply is a critical part of the solution," REMAX President and Chief Growth Officer Chris Lim said. "While there is still work ahead, giving communities more tools to encourage development is a meaningful first step toward a more balanced market that will help buyers compete and support long-term homeownership growth."
CFA flags 'widespread misunderstandings' about FHA requirements
The Consumer Federation of America (CFA) is raising concerns about the FHA's minimum property requirements (MPRs), which the agency characterizes as being widely misunderstood by consumers.
Used to ensure that the homes purchased with help from FHA-insured loans meet certain safety standards, the MPRs are "important" and "should continue," the CFA told HUD in a July 2 letter following the department's request for information.
But "widespread misunderstandings" about these requirements "have created unnecessary barriers for FHA borrowers," the CFA wrote, adding that there exists a perception among real estate agents and consumers "that FHA-financed transactions are unusually burdensome, likely require extensive repairs, and are prone to delayed or even failed closings compared to conventional financing."
To address these "pervasive myths and misunderstandings," the CFA urged the FHA to "prioritize consumer and industry education and improve communications on the exact nature of the MPRs and impacts on closing timelines and transactions," in part by making a checklist available in plain language on its website.
The CFA's recommendations "would directly address longstanding misconceptions surrounding FHA mortgages and the MPRs," the letter concluded.
Fed appoints task force leaders
On July 9, Kevin Warsh announced the teams that will lead the five task forces he created upon rejoining the Fed as its new chair.
Communications: Peter R. Fisher, professor of practice at the University of Washington's Foster School of Business; Arminio Fraga, founder and chairman of Gávea Investimentos and former president of the Central Bank of Brazil; and Mervyn King, former Bank of England governor
Balance Sheet Policy: Karen Dynan, professor of economics at Harvard University; Raghuram Rajan, professor of finance at the University of Chicago Booth School of Business and a former Reserve Bank of India governor; and Jeremy Stein, professor of economics at Harvard University and a former Fed governor
Data: Raj Chetty, professor of economics at Harvard University; Doug McMillon, former president and CEO of Walmart Inc.; and Kevin Murphy, professor of economics at the University of Chicago
Productivity and Jobs: Marc Andreessen, cofounder and general partner at Andreessen Horowitz; Charles I. Jones, professor of economics at Stanford University and currently on leave at Anthropic; and Asha Sharma, EVP and XBOX CEO at Microsoft Corp.
Inflation Frameworks: Greg Mankiw, professor of economics at Harvard University and a former Council of Economic Advisers chair; Thomas Sargent, professor of economics at New York University and a Nobel laureate; and William White, senior fellow at the C.D. Howe Institute and a former Bank for International Settlements economic adviser
Each task force "will carefully consider whether policymakers' means and methods, analytical tools and policy approaches can be improved upon," Warsh said in a statement. "The goal is straightforward: to ensure the Fed is best positioned to achieve our objectives in this consequential time."