Just minutes before adjourning for its summer recess, Congress prevented the shutdown of a critical Federal Housing Administration (FHA) mortgage insurance program for multifamily housing by giving it an additional $4 billion in loan commitment authority.
The increased FHA commitment authority cleared the House as its final order of business before it adjourned. It had been approved by the Senate earlier in the week.
“We applaud Congress for taking swift action before the recess to keep this FHA program in the market and operating for the remainder of the current fiscal year,” said Jerry Howard, CEO and executive vice president of the National Association of Home Builders (NAHB). “Without this increased authority, the affordable rental housing market could have been seriously disrupted. We will continue to monitor this situation closely to ensure that FHA’s loan authority remains sufficient to meet the demand for multifamily mortgage insurance in the months ahead.”
Each year Congress sets a ceiling on the total value of loans FHA can insure on multifamily properties. When it became clear earlier this summer that FHA would bump up against the ceiling well before the end of the fiscal year, NAHB took the lead in urging Congress to increase FHA’s insurance authority, which is used to encourage construction and rehabilitation of affordable rental housing.
FHA’s multifamily volume has been stronger than expected in large part because of increases in the size of loans that FHA is now authorized to insure. NAHB worked closely with Congress during the past three years to update the loan limits for FHA multifamily programs, to index the loan limits for inflation and to increase exception limits for high-cost markets.
Howard credited Senators Jack Reed (D-R.I.), Richard Shelby (R-Ala.), Paul Sarbanes (D-Md.), Christopher Bond (R-Mo.) and Barbara Mikulski (D-Md.) for spearheading this effort in the Senate. In the House, Representatives Robert Ney (R-Ohio), Jim Walsh (R-N.Y.) and Alan Mollohan (D-W.Va.) “worked diligently to ensure that the legislation would receive House consideration prior to adjournment,” Howard added.