Low-income families receiving Section 8 rental assistance could use their vouchers to purchase homes under major housing legislation passed by the House earlier this week. The Senate is expected to give its blessing to the bill, perhaps by early next week.

Under the bill, purchase vouchers would be in the same amount as what the family would receive in rental assistance. But they could be combined with other subsidies to increase a family's buying power.

To qualify, a family must not only be eligible for rental assistance but also must be first-time buyers with an annual household income of at least $10,300. No family member can have been an owner for at least three years prior to receiving ownership assistance, and no one may have an interest in another property while receive aid.

The House-passed bill also gives local governments greater flexibility to fashion ownership programs for their low-income citizens, makes it easier for seniors to refinance their government-insured reverse mortgages and makes some technical corrections to the private mortgage insurance cancellation law that was enacted two years ago.

In addition, it modernizes out-dated rules covering manufactured housing, the only housing in the country built to a national building code. Among other things, it establishes a dispute resolution program so that buyers are not caught in the middle when makers, retailers and installers blame each other for problems.

Currently, about 20 million people live full-time in more than 8 million manufactured homes.

The measure, which the House cleared by a voice vote, is similar to a bill passed by the lower chamber earlier this year with one glaring exception. Absent this time around is a provision that would have allowed teachers and policemen access to FHA-insured mortgages with only a 1 percent down payment.

Senate Banking Committee Chairman Phil Gramm, R-Texas, objected to that provision, which is why he kept the original bill bottled up in his committee. He didn't like the idea of granting government workers benefits not available to the general public. Now that the offending provision has been omitted, according to a committee spokesperson, the Texas Republican won't tand in the measure's way.

After meeting with Sen. Gramm on Monday, House Banking Chairman James Leach, R-Iowa, reintroduced the bill. "We are bringing this legislation back to the floor after consultation with the other body, with the expectation that this bill will eventually be enacted into law," Rep. Leach said in the House chamber, shortly before his colleagues approved the bill.

Actually, the measure incorporates two House-passed bills. It draws substantially from the American Homeownership and Economic Opportunity Act, which passed the House by a vote of 417 to 8 in April. And it contains provisions drawn from the Preserving Affordable Housing for Seniors and Vulnerable Families into the 21st Century Act, which cleared the house by a 405 to 5 tally in September.

"Affordable housing continues to be out of the reach for many Americans," Rep. Leach said. "A strong economy has created a dynamic where in many parts of the country the cost of real estate is rising faster than income levels. Although interest rates are not as high as at other times in our history, an unprecedented differential has nevertheless come into being between inflation and long-term interest rates, making financing of a home purchase extremely difficult."

The chairman also singled out Rep. Rick Lazio, R-N.Y., for praise, noting that for the last six years, the defeated Senate candidate has been "the recognized leader in Congress on affordable housing and community renewal issues."

Rep. Lazio's work, his Iowa colleague said, "will make a real difference in the everyday lives of low-income Americans for generations to come."

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