How the New Housing Bill Could Make It Easier To Get a Mortgage

The 21st Century Road to Housing Act, a compromise reached this week by the House and Senate, is poised to reshape the banking system and potentially increase mortgage lending by smaller institutions. The 381-page bill includes 45 provisions, with a significant portion addressing bank deregulation favored by the House. Representative French Hill (R-Arkansas), chair of the House Financial Services Committee, highlighted the inclusion of nine community banking bills and measures to limit institutional investors in the housing market. These provisions aim to address the reduced role of small banks in mortgage lending, a trend attributed by Realtor.com® senior economist Joel Berner to stringent compliance rules implemented after the Great Recession and the high cost of technological infrastructure required for efficient loan processing. The Bipartisan Policy Center noted that the bill's provisions for community banks, initially detailed in section 900, could facilitate increased construction lending. Dennis Shea, chair of the BPC's J. Ronald Terwilliger Center for Housing Policy, indicated that these regulatory adjustments are intended to support community banks and credit unions in their lending activities.