Home builders offer support for FHA housing legislation

Expressing strong support for H.R. 3995, the Housing Affordability for America Act of 2002, the nation's home builders April 24 told Congress that several of the bill's multifamily and single-family Federal Housing Administration mortgage insurance provisions are vital to increase the availability of affordable housing and expand rental housing and homeownership opportunities across the country.

"Indexing FHA multifamily mortgage loan limits to inflation and adjusting the limits in some very high cost cities will help to stem the growing shortage of affordable rental housing faced by millions of Americans," Kevin Kelly, a Wilmington, Del. home builder who testified on behalf of the National Association of Home Builders, told the House Financial Services Committee Housing Subcommittee.

"These measures will help stabilize the programs and give builders and lenders the confidence that they will be able to use the programs in their communities every year, even as construction and land costs rise over time," added Kelly. "Plus, several high-cost urban markets such as New York, Boston, San Francisco, Chicago and Los Angeles, which had previously been unable to take advantage of the FHA multifamily mortgage insurance programs, will now be able to provide much-needed new affordable housing to low- and moderate-income families."

The comprehensive housing bill would further enhance housing affordability by permanently extending the FHA single-family simplification down payment process, making it easier for low- and moderate-income families to obtain the necessary financing to purchase a home.

H.R. 3995 also would require federal agencies to submit a housing impact analysis with any proposed regulations if the regulations would have a significant negative impact on the availability of affordable housing.

"Layers of excessive and unnecessary regulation imposed by all levels of government federal, state and local can add thousands of dollars to the cost of a new home, making it difficult or even impossible for families to achieve homeownership or find affordable rental housing," said Kelly.

The bill also repeals the scheduled increase in the Ginnie Mae guaranty fee that was part of a higher education act passed in 1998. The increase would have raised the cost of housing for people using FHA insurance and Veterans Association guaranty programs.