Multifamily Leaders Call on HUD to Address Rising Rents through Reduced Insurance Premiums Tied to Actual Risk; Says Actions Needed to Match Washington Words

The Multifamily Lenders Council (MLC), a trade group representing longtime companies that originate and service FHA-insured financing for affordable rental housing, released the following statement today from its chair Michael Petrie, president of P/R Mortgage and Investment Corp.:

“In recent months more Washington policymakers have been saying the correct things about affordable rental housing. In October, the new HUD Secretary Julian Castro said, ‘finding a decent home you can afford to rent is a challenge. For lower income families, it's nearly impossible.’

“On January 27th, Mel Watt, head of the Federal Housing Finance Agency, noted before Congress that while rental housing supply is robust for wealthy neighborhoods, it is a different situation for the affordable end of the income scale.

“Yet as those who work with affordable rental housing on a daily basis, we do not yet see actions in this arena matching the words. Thus, MLC today calls for the US Department of Housing and Urban Development to reduce insurance premiums on all multi-family programs to the levels of Fiscal Year 2012; these programs did not experience elevated risk and should not be priced at the higher levels of the last few years.

“MLC has previously stated its concerns to HUD that this agency has tightened rental programs targeted to the middle class unnecessarily, as these programs have not shown weakness during the downturn, but have been tightened nonetheless. Despite MLC's pleas for relief, these key programs for working families remain hampered by outdated and unnecessary policies that reduce housing supply while not contributing to safety and soundness for taxpayers. MLC today also calls for HUD to restore historically reasonable (pre-2010) debt service coverage, loan-to-value, and loan-to-cost ratios for all programs.

“Ultimately the working families of America looking for safe, affordable rental housing can only measure progress in their lives with actions from the housing community, not words that sound promising but remain unfulfilled. On behalf of our membership across the country, I again urge HUD to take these specific steps to materially increase the supply of affordable housing in this country. Rents are on the rise daily. We need action.”