Randy Hultgren and Gwen Moore introduced the Housing Opportunity Mortgage Expansion (HOME) Act into the House of Representatives on 13 June.
The HOME Act would restore the membership of captives in the FHLB System if they joined before the Federal Housing Finance Agency (FHFA) first proposed its rule barring them from participating and if they can demonstrate a commitment to residential mortgage activities.
The FHFA adopted its final rule in January 2016 that banned real estate investment trusts in particular from using captives to gain access to the FHLB System.
FHLB captive insurer members that joined prior to January 2016 were given up to five years to terminate their membership. Those that joined after issuance were given a year.
Hultgren explained that the HOME Act provides a “reliable source of financing that community banks and credit unions in my community rely on for providing access to mortgage credit for families, not to mention its commitment to affordable housing through grant programmes and down-payment assistance”.
“This legislation clarifies that companies with a history and mission of supporting residential housing should be able to continue to serve our communities.”
Moore added: “It is essential that the FHLB has the capacity necessary to continue its mission to make homeownership possible for my constituents in Wisconsin.”