Working Families to Get Greater Access to Affordable Housing, Under the new ‘FHA Multifamily Housing Loan Limit Adjustment Act’

WASHINGTON, DC – To address the growing need for affordable housing for working families, Senators Jon S. Corzine (D-NJ) and Tom Carper (D-DE) today introduced the “Federal Housing Administration Multifamily Housing Loan Limit Adjustment Act.” Census Bureau statistics reveal over 711,000 moderate-income families face a critical need for rental housing. The bill helps these families by raising the FHA’s multi-family loan limits by 25 percent to meet recent increases in land, construction, and other costs. These loan limits would then continue to rise to match further increases in these costs. According to a recent study conducted by the Center for Housing Policy, nearly 14 million families across the nation either lived in substandard housing conditions or spent more than half their monthly income on the cost of housing. In addition, rising construction costs have resulted in a shortage of moderately priced affordable rental units, while rent increases now exceed inflation in all regions of the nation. Last year, Congress voted to provide access to affordable housing by expanding the Low Income Tax Credit program by 40% in 2002 and provide 79,000 incremental hosing vouchers to those who have critical housing needs. However, those efforts sought to address only the needs of low-income families. The Corzine-Carper legislation is aimed at expanding access to affordable housing for middle-class families. “For too many teachers, nurses and police officers, the struggle to gain access to affordable housing today is insurmountable,” said Corzine. “This legislation is designed specifically to help America’s middle-class families, who serve as the engine of our nation’s economy.” By increasing the loan limits and indexing them to increases in the Annual Construction Cost index, the bill creates incentives for greater investments in urban and high-priced rural areas through public-private partnerships. Potential partnerships include new rental housing for the elderly, the construction of cooperative housing projects, and the renovation of existing rental properties and condominiums. “Middle class families are increasingly stranded by rising rents and housing costs. The Federal Housing Administration has not been able to keep its commitment to help these families with available, affordable housing,” Carper said. “Increasing these loan limits is an immediate step towards solving this problem.”