FHA Small-Dollar Mortgages Act
- Bill Number
- H.R. 6774
- Origin Chamber
- House
- Congress
- 119th Congress, Session 1
- Policy Area
- Housing and Community Development
- Status
- Introduced
- Latest Action
- 2025-12-17: Referred to the House Committee on Financial Services.
- Last Updated
- 2026-06-11T23:26:31Z
AI-Generated Summary
FHA Small-Dollar Mortgages Act (H.R. 6774)
Purpose
This bill authorizes the Secretary of Housing and Urban Development (HUD), through the Federal Housing Commissioner, to create a temporary pilot program aimed at making small-dollar mortgages—loans of $100,000 or less for a borrower's main home (1- to 4-unit property)—more accessible, especially for those who might struggle with higher fixed costs of smaller loans.
Key Provisions
- Pilot Program Setup: HUD must establish the program within 1 year of enactment. It may include:
- Direct payments to lenders to encourage issuing these mortgages.
- Adjustments to Federal Housing Administration (FHA) terms and fees for small-dollar mortgages.
- Grants to borrowers to cover down payments, closing costs, appraisals, and title insurance.
- Outreach to potential borrowers about these mortgages.
- Technical assistance for lenders.
- Reporting Requirements: Annual reports to Congress starting 1 year after launch, continuing until 1 year after the program ends. Reports will cover:
- Outcomes of mortgages issued.
- Risks to the FHA's Mutual Mortgage Insurance Fund (the fund that protects lenders if borrowers default).
- Historical data on small-dollar mortgages (last 10 years), including amounts, borrower demographics, and lender types.
- Impact of fixed mortgage costs on lender profits.
- Regional analysis, focusing on rural areas with high need.
- Timeline:
- Program sunsets (ends) 4 years after starting.
- Authority expires 3 years after enactment—no new similar pilots allowed afterward.
- Definition: Small-dollar mortgage = original loan amount ≤ $100,000, secured by borrower's principal residence (1-4 units).
Significant Changes to Existing Law
- Introduces a new pilot program under FHA authority; no amendments to existing FHA rules, but allows temporary flexibility in fees, payments, and grants specifically for small-dollar loans.
- Mandates detailed reporting and regional analysis not previously required for this mortgage type.
Potential Impacts
- Government Agencies: HUD/FHA gains tools to promote affordable housing but must monitor risks to its insurance fund; increases administrative workload for reports and outreach.
- Citizens: Could expand homeownership for low- and moderate-income buyers, especially in rural or high-cost areas where small homes are common, by offsetting high fixed costs (e.g., appraisals) that make tiny loans unprofitable for lenders.
- No direct international relations impact.
Main Stakeholders Affected
- Borrowers: Primarily low-income individuals, first-time buyers, and rural residents seeking affordable homes.
- Lenders (Mortgagees): Community banks and smaller institutions that may now find small loans viable with incentives.
- HUD/FHA: Implements and oversees the program.
- Congress: Receives reports to evaluate effectiveness and risks.
Notable Legal, Constitutional, or Political Implications
- Legal: Temporary nature limits long-term fiscal exposure; explicit sunset and authority expiration prevent indefinite expansion. Relies on existing FHA powers without needing new appropriations (uses discretionary authority).
- Constitutional: No apparent issues; standard congressional spending and regulatory authority under commerce clause for housing finance.
- Political: Focuses on underserved markets (e.g., rural areas), potentially bipartisan appeal for affordable housing; risk assessments address concerns about taxpayer-funded insurance fund solvency.
This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.
Sponsor
Cosponsors (1)
Recent Actions
- 2025-12-17: Referred to the House Committee on Financial Services.
- 2025-12-17: Introduced in House
- 2025-12-17: Introduced in House
Bill Versions
- FHA Small-Dollar Mortgages Act — issued 2025-12-17 — PDF (4 pages)