Multifamily Housing Development & Insurance

Overview

FHA's multifamily loan programs provide insurance that assists both the private and public sectors to finance the construction, purchase and rehabilitation, or the refinancing of rental housing projects, condominiums, and cooperatives.

NAR recognizes the need to maintain the viability of federal multi-family housing programs and to increase the availability and affordability of rental housing. Without federal involvement, such financing can be difficult to find in the private market.  Especially for low-income renters, and in communities experiencing economic distress, such financing is often unavailable in the private market.  We encourage the removal of policy and program disincentives that inhibit owner participation in the development of new rental housing or the preservation of existing safe and affordable rental housing.

Political Advocacy

Current Legislation/Regulation

None at this time.


In-Depth

Letters to federal agencies
Issue summary
NAR Federal Issues Tracker


Legislative Contact(s):

Megan Booth,
mbooth@realtors.org
202-383-1222

Joe Harris,
jharris@realtors.org
202-383-1226

What is the fundamental issue?

FHA's multifamily loan programs provide insurance that assists both the private and public sectors to finance the construction, purchase and rehabilitation, or the refinancing of rental housing projects, condominiums, and cooperatives.

I am a real estate professional. What does this mean for my business?

Affordable rental housing is the first step on the housing ladder for many Americans.

NAR Policy:

NAR recognizes the need to maintain the viability of federal multi-family housing programs and to increase the availability and affordability of rental housing. Without federal involvement, such financing can be difficult to find in the private market.  Especially for low-income renters, and in communities experiencing economic distress, such financing is often unavailable in the private market.  We encourage the removal of policy and program disincentives that inhibit owner participation in the development of new rental housing or the preservation of existing safe and affordable rental housing.

Legislative/Regulatory Status/Outlook

The need for affordable rental housing continues to be great. In recent years, FHA’s role in the multifamily market has increased dramatically – nearly 4 times its size from just several years ago. As lenders remain slow to provide financing for construction loans, FHA is the primary source of construction for multifamily developers and owners. FHA has implemented a number of new procedures and requirements for its multifamily loans. They have strengthened underwriting by changing ratios and increasing documentation. They have also implemented a number of oversight and risk-management provisions. As demand continues to be high, we urge FHA to look for ways to streamline procedures.

High rise construction costs are significantly different than garden-style apartments. Yet the loan limits for the two are nearly the same. Because the so-called “elevator” limits are so low, many urban areas have not had any properties endorsed with FHA multifamily insurance in the last several years. We urge Congress to pass legislation to increase the elevator loan limits for multifamily to assure all our nation’s families can find affordable rental housing.

NAR Committee:

Federal Financing and Housing Policy Committee

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