	Introduction

At the start of the 112 th Congress, the economy was no longer officially in recession. However, housing markets and the economy as a whole have both continued to appear fragile. In the short term, this raises policy questions about whether further government intervention is necessary or desirable to support housing markets, or if such intervention might postpone a necessary market correction. It also raises questions about whether scaling back government involvement in housing finance could further harm already weak housing markets. Finally, given perennial issues related to housing for low-income and other vulnerable populations, the weak economy and the tight fiscal environment raise questions about which housing programs to prioritize in an environment of lower federal spending. Further, many other economic indicators remain weak, and the continuation of such positive signs in housing markets likely depends largely on economic conditions, including job growth, going forward. Housing Finance and Homeownership

This section describes issues related to housing finance, mortgage markets, and accessing and maintaining homeownership that have been considered by the 112 th Congress. The Future of Fannie Mae and Freddie Mac

Fannie Mae and Freddie Mac have congressional charters and are known as government-sponsored enterprises (GSEs). More details on these options, including legislative language, have not been provided. In the longer term, FHA's future role in the mortgage market is likely to be considered as part of the larger discussion about the U.S. housing finance system and the future of the GSEs. Oversight of Implementation of Housing-Related Provisions in the Dodd-Frank Act

The 111 th Congress enacted broad financial reform legislation in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act, P.L. 111-203 ). Issues Related to the Ability to Repay and Risk Retention Standards

The Dodd-Frank Act's ability to repay and credit risk retention provisions have the potential to reduce the risk of mortgage defaults that played an integral role in the mortgage, housing, and financial market turmoil that began in the summer of 2008. Mortgage Servicing Issues

The role that mortgage servicers play in the housing finance system has received added attention in the wake of high foreclosure rates, recent investigations into possible irregularities in the foreclosure process, and questions about servicers' execution of federal mortgage modification initiatives. Some national mortgage servicing standards are designed to protect consumers. This section describes issues related to such housing assistance, most of which is administered by HUD. Appropriations for the Department of Housing and Urban Development

Concern in Congress about reducing federal budget deficits has led to increased interest in reducing the amount of discretionary funding provided each year through the annual appropriations process. In a budget environment featuring limits on discretionary spending, the pressure to provide more funding for HUD's largest programs must be balanced against the pressure from states, localities, and advocates to maintain or increase funding for other HUD programs, such as the Community Development Block Grant (CDBG) program, grants for homelessness assistance, and funding for Native American housing. Section 8 Housing Choice Voucher Program Reform

For each of the past several years, Congress has considered reforms to the Section 8 Housing Choice Voucher program that are primarily aimed at streamlining the administration of the program. For more information about the public housing program, see CRS Report R41654, Introduction to Public Housing , by [author name scrubbed]. 4868 ), which was approved by the House Financial Services Committee, attempted to address some of the issues involved in preserving HUD-subsidized housing. It was not enacted before the end of the 111 th Congress. At the same time, critics of the Housing Trust Fund have opposed efforts to fund the program, and have also attempted to eliminate the Housing Trust Fund entirely. The proposed rule includes a number of provisions related to oversight and other issues, including provisions similar to those that were included in the FY2012 appropriations law.
As the 112th Congress began, the economy was no longer officially in recession. However, housing markets remain fragile, many economic indicators remain weak, and home foreclosure rates remain high. Against this backdrop, the 112th Congress has considered a number of housing-related issues. Broadly speaking, these issues include long-term questions related to reforms to the housing finance system, short-term concerns related to ongoing turmoil in housing markets, perennial issues related to housing assistance programs, and possible reductions in funding for housing programs administered by the Department of Housing and Urban Development (HUD).
Given the role that housing played in the recent economic downturn, Congress has expressed interest in reforming the housing finance system to help protect the economy from similar problems in the future. In this vein, the 112th Congress has begun to consider long-term questions about the government's role in housing finance going forward. Such questions include the future of Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs) currently in government conservatorship, and the role of the Federal Housing Administration (FHA). The 112th Congress has also exercised its oversight powers with regard to the implementation of housing- and mortgage-related provisions of the Dodd-Frank Wall Street Reform and Consumer Protection Act (P.L. 111-203), which was enacted during the 111th Congress. Such provisions include ability to repay standards that apply to mortgage originators and risk retention standards that apply to asset securitizers. Many Members of Congress have expressed concern about the implications that some of these provisions could have for private mortgage lending and access to mortgage credit.
At the same time, the ongoing effects of the recent economic turmoil on consumers and housing markets raise questions about whether further government intervention is warranted in the short term to address ongoing foreclosure issues or to stimulate housing demand. The housing markets' fragility has also led to debates about whether policy options considered by the 112th Congress to reduce government involvement in the mortgage market would have negative effects on the housing recovery.
Concerns about the nation's budget deficit have led to increased calls for reduced government spending, and an environment of fiscal austerity will likely have implications for housing-related programs and activities along with other domestic discretionary programs. A law providing full-year FY2011 appropriations was not enacted until several months into the 112th Congress, and that law included cuts to several HUD programs, including reduced funding for the Community Development Block Grant (CDGB) and HOME programs. Appropriations for FY2012 included further cuts to housing programs, although some specific programs saw increases in funding. The 112th Congress has also considered perennial issues related to housing for low-income and other vulnerable populations, including possible reforms to the public housing and Section 8 Housing Choice Voucher programs. The debate over the future of federal housing assistance programs has been affected, and will likely continue to be affected, by both the fiscal environment and the ongoing effects of the recent recession and turmoil in U.S. housing markets.
This report provides a brief summary of major housing issues that have been active in the 112th Congress. It does not provide comprehensive coverage of the issues or closely track active legislation, but it includes references to related CRS products that offer more detailed information and analysis.