Washington Hotline - September 4, 2009

HUD to Allow FHA Multifamily Mortgage Insurance for Projects Under Construction

HUD has issued Mortgagee Letter 2009-26 which provides temporary authority to provide FHA multifamily mortgage insurance under the Sections 221, 221(d)3 and (d)4 and Section 231 programs to projects that have been unable to complete construction due to a loss of funding. The parameters of the authority are fairly narrow in that only non-HUD-insured new construction apartment projects that have started or completed site improvements and building foundation work are eligible.

Additionally, all construction work must have stopped before an application for FHA insurance is submitted, and construction cannot commence until the project receives initial endorsement. Davis- Bacon wage rates will apply to all construction work going forward, but will not be applied retroactively to the construction in place. Submission of a new (not updated) appraisal and market study also is required.

The temporary authority is effective for the next six months, at which point HUD will evaluate the effectiveness of the waiver and may elect to extend the program if warrented.

For more information, e-mail Claudia Kedda or call her at 800-368-5242 x8352.

Multifamily Sector Will Take Some Time to Recover

Improvements in the multifamily industry will take some time, as indicated by results of the latest NAHB Multifamily Market Index (MMI), released on Aug. 19. The MMI for the second quarter of 2009 continued on a downward path across all rental sectors, although the condo index showed some mild improvement from the same time last year.

According to NAHB Chief Economist David Crowe, "The continued contraction in multifamily starts is exacerbated by the 'shadow market' of empty foreclosed single-family homes and condos that are being rented at below-market rates by investor-owners." The MMI survey's "special questions" section this time around asked condo developers about their firms' sales cancellation rates. While 41% reported no change in their cancellation rates compared to last year's second quarter, 38% reported higher or substantially higher cancellation rates, with only 21% reporting lower cancellation rates. Nearly three-quarters of cancelled sales were to individual buyers, and a smaller portion (19%) were to individual investors. Fewer than one in 10 cancelled sales were to a corporate or large investor/buyer. Meanwhile, just over half of builders reported that they've dropped their condo prices, with the average reduction pegged at 17%.

Read the press release here.

For more information, email Ann Marie Moriarty or call her at 800-638-5242 x8350.

Proposed ELGs Could Leave Builders and Developers in the Red

Builders and developers will have to make drastic changes that are both expensive and difficult to implement in order to manage storm water discharge from construction sites under the EPA's recently proposed effluent limitation guidelines (ELGs) for the construction industry.

In a newly published piece in NBN Online, longtime Environmental Issues Committee member Chuck Ellison explains the startling ramifications of this very troubling proposal. Ellison, who is a vice president for Miller & Smith home builders in the Washington, D.C. metro area, also recently brought his concerns directly to EPA officials in a meeting that included NAHB staff. 

Ellison explained that instead of building sediment ponds with passive storm water collection systems, the proposed guidelines could require active systems — including the manpower to run them — in areas of the country where clay makes up more than 10% of the soil and there is a lot of rain.

For one of his company's sites where 11 different sediment basins are currently employed, he estimates they would need 11 machines and at least four people on site when they are pumping — including when it rains at night.

To say that such an operation would be very costly is a dramatic understatement. In fact, NAHB estimates that the proposed requirements could cost developers up to $45,000 per acre to implement, with questionable environmental benefits.

Leading up to EPA's final decision on ELGs, our association continues to reach out to the agency with our grave concerns, as we did in a meeting this week with the new Assistant Administrator for Water.

Read  in NBN Online, or e-mail Calli Schmidt, 800-368-5242 x8132.

OSHA Compliance Gets a Little Easier

OSHA will withdraw an interim enforcement policy on fall protection for certain residential construction activities, a move that NAHB asked the agency to consider as of last year.

In April of 2008, NAHB requested that OSHA rescind this policy because it had created confusion in the residential construction industry over what fall protection methods and systems needed to be used to comply with OSHA standards. Specifically, NAHB noted that it was extremely difficult for builders and trade contractors to locate, review and comprehend all of the information they needed to be in compliance.

In a statement following OSHA's latest decision, NAHB commended the agency "for taking this step to protect workers and for recognizing NAHB's assertion that due to advances in fall protection equipment technology and construction methods, at this time the best action is to reevaluate this directive." While home builders should be aware that the compliance enforcement policy will be changing, they are of course still encouraged to implement fall protection methods and systems on a continuous basis.

Read more in NBN Online, or e-mail Rob Matuga, 800-368-5242x 8507.

Resource: Get Authorized Quickly for a $500 GM Rebate

Great news!  GM and NAHB have agreed to go back to the old GM authorization process that was in place back in 2006 and 2007.  Here is an overview of the process for your records.

Quick Steps to Get Authorization to Save $500

1. Go to www.nahb.org/ma and click on the GM logo.
2. Click on the Get Your Proof of Membership Form button
3. If the member is logged in to www.nahb.org the page will populate with their information.  If not, the page will prompt them to either log-in to nahb.org or to create a log-in if they do not have one already. Members will need their PIN number to create a log-in. 
4. Print the Proof of Membership documentation and give to the dealer.

Process for New and/or Recently Renewed Members

• Members should contact their local HBAs to gain immediate access to the program. 
• The HBA will need to fill out a form that it will fax to the member directly. 
• If the HBA has questions about how to do this, complete instructions can be found in the Member Advantage Toolkit. 

Additional information about the GM program, as well as all other member discounts, can be found at www.nahb.org/ma. 

Calendar: Fall Board, Construction Forecast, Multifamily Marketing Webinar

September

See You in Chicago! 2009 Fall Board of Directors Meeting September 30 - October 4 Sheraton Chicago Hotel & Tower 301 East North Water Street Chicago IL, 60611 REGISTER TODAY!

October
 

Plan to Attend Construction Forecast Conference on Oct. 21 Plan to attend the 2009 Fall NAHB Construction Forecast Conference & Webcast on Oct. 21 in Washington, D.C. — or watch it on the Web — to get the latest facts, insights and analysis of the housing industry. Panels of nationally recognized experts at the day-long conference will discuss economic trends, government policies, developments in the housing industry and the results from NAHB's recent surveys. For more information and to register, visit www.nahb.org/cfc.

Marketing Multifamily Housing in Today's Complex Environment Thursday, October 22, 2009 2:00 - 3:00 pm ET Registration will be available soon. Stay tuned! Participants may receive continuing education credit for all NAHB professional designations. Great marketing maximizes profits. Find out how to increase occupancy and retain customers in apartment and condominium communities by highlighting innovative programs that distinguish your property from the competition. Learn how to connect to your target market by creating a customer experience that becomes your most valuable advertisement. Nationally known marketing professionals will tell you how to position your marketing efforts in a complex market for maximum impact and how to best engage with current and potential customers via social networking and maintaining a fresh online presence. For more information about this webinar, contact Sheronda Carr at scarr@nahb.org or call her at 800-368-5242 x 8168.

Registration is open for the 2010 International Builders Show Jan.19-22 For a limited time, NAHB members can receive a complimentary 4-day exhibit registration, giving them access to the hottest exhibit floor in the building industry for absolutely no charge! Purchase a one or two day education pass, giving you access to education on the days you select and 4-day pass to the exhibit floor. And remember, education sessions are FREE on Friday!