U.S. House Passes Bill to Relieve Senior Citizen Expenses

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Washington, D.C. – The U.S. House today passed a bill that I co-sponsored to enable more senior citizens to utilize their home equity toward health and other expenses common to seniors.

Among other provisions, H.R. 5121, the Expanding American Homeownership Act of 2006, facilitates the issuance of reverse mortgages, an increasingly popular product with seniors. Reverse mortgages allow homeowners to withdraw home equity for expenses while deferring loan repayment until the owner dies or the home is sold.


The number of reverse mortgages insured by the federal government nationwide more than doubled from 18,000 in 2003 to 43,000 in 2005, as more and more seniors on fixed incomes have found these loans to be extremely helpful in keeping up with medical costs, home improvement costs, property taxes and other expenses,” said Case. “As of last April, a total of about 200,000 such loans have been insured. This bill will remove the statutory cap that has limited the Federal Housing Administration (FHA) to insuring 250,000 reverse mortgages-a level that will be reached next year.

The FHA’s reverse mortgage program enables homeowners who are at least 62 years of age to withdraw some of the equity in their home in the form of monthly payments, in a lump sum, or through a line of credit. This allows seniors to obtain a loan against their homes that does not have to be paid back for as long as they live in the home. Under current law, FHA is limited to a total of 250,000 such loans which cannot be used to buy another home.

By lifting the cap on reverse mortgages, the number of homeowners who could obtain loan insurance under the FHA’s reverse mortgage program (the Home Equity Conversion Mortgage, or HECM) would increase. The Congressional Budget Office (CBO) says there are over 17 million households with owners aged 65 or older, and as more consumers become aware of reverse mortgages, more households will become eligible for the program. In addition, there is relatively little private availability of these loans, heightening FHA’s importance.

This legislation would make it possible for the FHA to guarantee an additional 80,000 loans valued at about $20 billion in 2007. This would be in addition to 20,000 loans valued at $5 billion that the CBO estimates would be insured during the first quarter of fiscal year 2007.

The bill also would set a single nationwide loan limit for the reverse mortgage program and allow borrowers to use the loans to purchase a new home. This will help the increasing number of seniors who are searching for new housing within senior communities.

The CBO estimates that the bill would save the federal government $2.3 billion over the 2007-2011 period. The saving would stem from increasing the number of homeowners who could obtain loan insurance under the HECM program and under FHA’s single-family loan insurance program. The increased collections would offset the cost of the program because the fees paid by borrowers generally exceed the cost of expected defaults, according to the GAO. As a result, enactment of the bill would not affect direct spending or revenues.

For Hawaii, we still have remaining issues in assuring that this and other home financing is fully available, especially to the rural parts of our state. However, this is a fiscally responsible bill that provides a good step in the right direction for our seniors.

”’U.S. Congressman Ed Case is a Democrat representing the Second District in Hawaii.”’

”’HawaiiReporter.com reports the real news, and prints all editorials submitted, even if they do not represent the viewpoint of the editors, as long as they are written clearly. Send editorials to”’ mailto:Malia@HawaiiReporter.com





  1. This is very kind for senior citizen to have some kind of relieve. it give them a home improvement responsibility. I am with decision of having this bill going. Thanks for sharing

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