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Week of May 10, 2004

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President's Message

* For Working Families, Affordable Housing Is in Short Supply

Housing and Economics

* Consumers Win Latest Round in Canadian Lumber Dispute
* A Housing Price Bubble Does Not Exist, Freddie Mac Economists Say
* Eye on the Economy

Housing Politics

* Sarbanes Blames ‘Ideologues’ for Impasse Over GSE Reform Legislation
* Provisions in Habitat Reform Bill Supported by Builders
* NAHB Unveils Virtual 'Get Out The Vote' Election Web Service

Business Management

* NAHB Kicks Off General Liability Insurance Initiative
* Review Your Accounting Reports to Protect Yourself From Fraud


* Supreme Court Decision Brings Good News on Residential Construction Equipment
* Storm Water Permit Guide Available at


* Stillman Knight Honored for Affordable Housing Efforts
* High-Density Housing an Opportunity for ‘Urban Quality’ Design

Small Builders and Remodelers

* Build a Brand: Become a Household Name
* Publicize May as National Remodeling Month in Your Market


* Survey Says Buyers Want Laundry Rooms, Linen Closets
* Best in American Living Awards Accepting Entries

Seniors Housing

* HUD Urged to Provide FHA Insurance for Age-Restricted Elderly Housing
* Not-So-Big Homes Provide Unique Marketing Advantages

Legal Issues

* Texas Town’s Misconduct Not Enough to Show Taking

Housing Finance

* Responses Sought on HUD Proposal For Fannie Mae, Freddie Mac Housing Goals
* National Housing Conference to Honor Angelo Mozilo for Lowering Homeownership Barriers

Codes and Standards

* Stair Geometry, Window Sill Heights on Hearings Agenda


* Second International Housing Conference of the Americas Promotes Business Across Mexican Border


* NAHB Members, Job Corps Students Help DC Habitat in Family Build

Building Products

* Vinyl Siding Stays Put During Severe Weather

Builder's Engineer

* Gold-Fringed Business Cards?

Building News Coast To Coast

Association News & Events

* Calendar of Events

NBN Back Issues


HUD Urged to Provide FHA Insurance for Age-Restricted Elderly Housing

In policy adopted at its spring meeting in Washington, D.C. on May 2, NAHB’s board of directors urged the Department of Housing and Urban Development to provide FHA insurance for properties that are intended to provide multifamily rental housing exclusively for older persons. The programs involved are Sections 221(d)(4), 221(d)(3) and 223(f).

NAHB members learned recently that HUD is refusing to provide FHA insurance for multifamily rental housing developments for the elderly, if the property prohibits children. Not providing FHA insurance for properties that discriminate against children is long-standing policy of the department, according to HUD.

The Fair Housing Amendments Act of 1988 and the Housing for Older Persons Act of 1995 (HOPA) explicitly provide an exemption to the prohibition against discrimination based on familial status for housing intended for older persons.

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The Fair Housing Amendments Act of 1988 defines “housing for older persons” as housing:

  • Provided under any state or federal program that the HUD secretary determines is specifically designed and operated to assist elderly persons
  • Intended for, and solely occupied by, persons 62 years or older; or
  • Intended and operated for occupancy by persons 55 or older, with at least 80% of the occupied units occupied by at least one person who is 55 or older

HUD’s policy is not based on statutory or regulatory requirements, and it is not provided to applicants for FHA insurance in writing. In fact, several NAHB members were not told about the policy until they were preparing to close their FHA loans. Although HUD provided waivers to allow the projects to go forward, the department has made it clear that such waivers will no longer be granted.

HUD’s policy makes it more difficult and costly for owners to finance affordable seniors-only housing. Many of these projects are financed with Low Income Housing Tax Credits, which must be obtained on a competitive basis. Because they regard the provision of elderly housing as a high priority, many states award more points to developers who promise to provide housing restricted to elderly occupants. Securing FHA insurance ensures lower long-term financing costs, which increases affordability to the residents.

In addition, some localities have chosen to provide special zoning districts exclusively for the development of communities for seniors. To obtain building approval, owners must restrict occupancy to persons who are 55 or older, which is permitted by the Fair Housing Amendments Act. If developers are not able to use FHA insurance in these districts, then these communities will be deprived of needed affordable seniors housing.

“HUD’s policy could have a significant impact on the ability of builders to do business in the area of housing for older persons,” said Sheila Salmon, a senior attorney with Washington, DC-based Coan & Lyons and chair of the NAHB Seniors Housing Council's Advocacy Committee. “The result could be a significant reduction in the amount of affordable housing available to many older Americans.”

HUD’s current policy prevents many seniors from living in affordable properties for older persons only, impedes the production of affordable housing for seniors and circumvents the intent of Congress to ensure that older persons have a right to live in age-restricted housing, according to NAHB.

If HUD fails to change its policy, NAHB will urge Congress to direct HUD to provide FHA insurance to age-restricted housing intended solely for older persons, as provided for under the Fair Housing Amendments Act of 1988 and HOPA.

For more information, e-mail Claudia Kedda or call her at 800-368-5242 x8352.
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