Calling it a victory for affordable housing, the National Association of Home Builders (NAHB) today applauded the Department of Housing and Urban Development's (HUD) decision to cancel its planned rise in insurance premiums for several key Federal Housing Authority (FHA) programs that support new construction or substantial renovation of multifamily rental properties.
"Given the current difficulties in the mortgage markets, FHA programs are more important than ever for builders trying to provide affordable rental housing to America's working families," said NAHB President Brian Catalde, a Southern California home builder. "If the premium increase had been implemented, it would have had a very significant negative impact."
HUD had given notice in November that it planned to push up mortgage insurance premiums on the Section 221(d)(4) program, as well as other programs, by as much as 16 basis points. The increase was scheduled to take effect on Dec. 1 of last year, but HUD delayed its implementation after NAHB and other industry groups voiced strong opposition to the increase. NAHB led a coalition fighting the planned increase, providing economic data and analysis that showed what a tremendous effect such a dramatic increase would have on the program, which overwhelmingly serves renters whose incomes are only 60 to 80 percent of an area's median income.
"FHA supports affordable lending for the single family markets, and it should also support affordable lending for multifamily rental housing for low and moderate income households, and holding the line on premiums will help ensure that it does," said Catalde.
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ABOUT NAHB: The National Association of Home Builders is a Washington-based trade association representing more than 235,000 members involved in home building, remodeling, multifamily construction, property management, subcontracting, design, housing finance, building product manufacturing and other aspects of residential and light commercial construction. Known as "the voice of the housing industry," NAHB is affiliated with more than 800 state and local home builders associations around the country. NAHB's builder members will construct 80 percent of the more than 1.08 million new housing units projected for 2008.
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