More than 45 House Republicans have sent a letter to Federal Housing Finance Agency (FHFA) Director William Pulte asking the agency to reverse its guidance to restrict Actual Cash Value (ACV) homeowners’ insurance policies for federally backed mortgages.
“We should be making it easier for young families and professionals especially in rural towns to own a piece of the American Dream, not harder to buy a house,” said Congressman Addison McDowell (R-NC), who led the effort. “That is why I’m urging Director Pulte to seriously re-evaluate the Federal Housing Finance Agency’s recent guidance that adds additional cost to homeownership through a one-size-fits all pocket books approach to home insurance. I’ve heard from folks in North Carolina’s Sixth district (which he represents), and they are very clear, achieving homeownership is hard enough, new homeowners need more options to lower costs, not less.”
What’s at Stake
The letter argues that the FHFA’s one-size-fits-all approach ignores the realities of diverse housing markets across the nation, especially in rural areas, pointing out that many new homeowners in rural areas are looking to buy houses with modest market values, older construction, and appraisals that fall below replacement cost. Considering this, RCV coverage price options hinder the ability to afford the American dream of owning a home.
“In many rural markets, ACV policies are not only more affordable, but they are often the only policies available,” the letter adds. “National carriers are already reducing their presence in certain high risk or low population regions, leaving Farm Bureaus and smaller regional insurers as the only viable option for families. These local carriers often provide ACV coverage as a practical, state-regulated solution. Prohibiting those products from eligibility under GSE standards risks cutting off the last viable coverage option for families in our states.”
“Fannie and Freddie are needlessly putting the dream of home ownership further out of reach for many Americans through a Biden-era mandate limiting consumer choice when it comes to insurance coverage. Amid rising prices and a shortage of housing stock, homebuyers should be able to choose the coverage that meets their needs and their budget,” said Jimi Grande, senior vice president of federal and political affairs for the National Association of Mutual Insurance Companies, which signed the letter along with the congressmen, the Independent Insurance Agents and Brokers of America (the Big “I”), and the American Property Casualty Insurance Association (APCIA).
The post House Republicans, Insurance Groups Urge FHFA to Reverse Home Insurance Guidance first appeared on The MortgagePoint.
