The Senate Appropriations Committee late last week approved a fiscal 2002 budget for the Department of Housing and Urban Development that includes authorization for FHA to begin insuring hybrid adjustable-rate mortgages. Under the proposed plan, FHA could insure one-year ARMs that have fixed interest rates for at least the first three years of the loan. In the conventional market, so-called hybrid ARMs come with initial fixed-rate periods of up to 10 years, with both five-