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House Approves HOPE VI, Bill on FHA Multifamily Limits
In a victory for NAHB, the House on Sept. 27 approved three bills that would renew public housing construction and make multifamily housing more affordable.
Lawmakers passed H.R. 5347, sponsored by Rep. Christopher Shays (R-Conn.), which would authorize the Department of Housing and Urban Development to spend up to $60 million on the HOPE VI program in fiscal 2007.
HOPE VI has been used by communities across the nation to tear down blighted public housing projects that exist in isolation from the greater community, and replace them with safe, affordable, high-quality mixed-income developments that promote homeownership opportunities and provide affordable rental housing.
Noting that the Bush Administration’s fiscal 2007 budget proposed eliminating HOPE VI funding, NAHB earlier this year sent a letter to the full House urging lawmakers to continue their support for the program.
Robert Greer, president of The Michaels Development Company based in the Philadelphia area, builds affordable housing in 27 states and says that the HOPE VI program is absolutely essential to help meet the housing needs of low-income families.
“I am very excited to hear this news because this enables us to continue our efforts in working with local housing authorities to significantly change distressed neighborhoods that have a concentration of low-income households into revitalized communities that include all income groups,” said Greer. “Having worked with 17 HOPE VI programs, it has been our experience that these redevelopment projects are the single greatest factor in transforming areas of intense poverty, crime and drugs into thriving mixed-income residential communities.”
The final spending authorization for the program is still to be determined. While H.R. 5347 authorizes up to $60 million in fiscal 2007, the House has appropriated $30 million for the program in its budget, while the Senate Appropriations Committee has earmarked $100 million. The two chambers will ultimately reconcile their differences and come up with a final spending amount.
In addition to reauthorizing HOPE VI, the House also passed H.R. 5503, legislation sponsored by Rep. Gary Miller (R-Calif.) that would provide the HUD secretary with more leeway to raise FHA multifamily mortgage limits in urban and other high-cost areas — where the need for affordable rental housing is particularly critical.
The bill is necessary because FHA limits are inadequate to accommodate new construction in a number of major metropolitan areas — including Boston, New York, Chicago, Los Angeles and San Francisco — where construction costs are significantly higher than in other areas of the country.
H.R. 5503 would permit HUD to increase the FHA loan limits for apartment buildings in high-cost areas by up to 170% (from the current 140%). The HUD secretary would also be able to increase the base loan limits by up to 215% on a case-by-case basis.
“While I can now take advantage of the loan program to utilize FHA-backed loans, which offer lower interest rates and a longer payment period than conventional loans, this bill would give our firm the flexibility to expand into larger markets,” said Lance Swank, chief financial officer of The Sterling Group, headquartered in Mishawaka, Ind. “In short, this would help my business to increase the production of much-needed affordable rental units in higher-cost areas.”
Finally, by an overwhelming 416-to-1 margin, the House adopted H.R. 6115, legislation that would reauthorize the mark-to-market program through the end of the 2011 fiscal year.
The bill would lower the cost to the federal government of renewing Sec. 8 contracts by restructuring mortgages and lowering rents. It also extends from three to five years the period during which a community-approved non-profit may purchase mark-to-market property after the closing; expands eligibility to disaster-damaged properties and erases any question of the eligibility of properties damaged by Hurricanes Katrina, Rita or Wilma or other natural disasters.
To read the legislation, click here and enter the bill number in the box at the center of the page.
For more information, e-mail Jenna Morgan Hamilton at NAHB, or call her at 800-368-5242 x8407; or contact Claudia Kedda, x8352.
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