HUD Hikes Loan Limits for Multiunit Housing

Housing and Urban Development Secretary Mel Martinez announced that the department will increase Federal Housing Administration multifamily loan limits by 25% in its fiscal 2002 budget. The increase is designed to spur construction of affordable rental housing, and comes on the heels of last week’s call by housing advocates to make the move. Only one federally insured affordable housing development was built in Los Angeles last year. None was built in San Francisco, New York and Boston. Under FHA multifamily programs, lenders obtain insurance on mortgages to build or refinance apartment buildings. Insurance limits have not been raised since 1992. Building costs, meanwhile, have doubled in many cities, creating a severe shortage of affordable rental housing. “This increase will create a tremendous push toward stemming the critical housing needs facing more than 7.5 million renters,” said Andrew D. Woodward, president of the Mortgage Bankers Assn. of America.