NAHB Hits the Target on All of Its FHA Multifamily Legislative Goals
In December, President Bush was poised to sign the "American Dream Downpayment Act" into law — a measure that contains a provision giving FHA the ability to significantly raise mortgage insurance loan limits in high-cost areas

This marks the final segment of a four-part strategy to address builder concerns about the FHA Multifamily Mortgage Insurance program.

With this latest improvement, the HUD secretary will have the authority to raise the mortgage loan limits in high-cost areas by up to 140% of the program’s base limit (from the current limit of 110%). And on a project-by-project basis in high-cost areas, the HUD secretary will have the discretion to raise the maximum loan limit by up to 170%.

This will enable developers to more easily build rental housing in the nation’s most costly markets — areas that tend to be among those most in need of such housing.

NAHB’s effort began in the fall of 2001 when it successfully persuaded Congress to raise the FHA Multifamily Mortgage Insurance program’s base loan limits by 25%. Those limits had not been raised since 1992. Last year, Congress agreed to index those limits to inflation, effective January 1, 2003.

Those successes are in addition to work by NAHB to help HUD modify the model it was using to set mortgage insurance premiums, which was resulting in unreasonably high premiums for builders. During meetings with HUD, NAHB economists explained the problems and suggested solutions. HUD now  incorporates NAHB’s approach to set insurance premiums that are reasonable and accurate. [ return to top ]