FHA funding renewed, loan limits increased.

Although Congress failed to complete its budget work before adjourning, it did pass a last-minute bill (H.J. Res. 82) providing a temporary increase in commitment authority for the FHA multifamily insurance program. HUD had indefinitely halted the program on Dec. 4 when, due to an oversight, the continuing resolution currently funding the government until the FY 2004 appropriations are passed (see above) failed to include sufficient commitment authority for the program. NAA/NMHC actively worked to encourage passage of the measure in order to avoid a six-week shutdown of the program until Congress returns in late January The new resolution provides $7.7 billion in commitment authority through Jan. 31.

In separate action, on Dec. 16, President Bush signed legislation (S. 811) that will boost FHA-insured multifamily loan limits in high cost areas and authorize $200 million annually to assist low- and moderate-income homebuyers with downpayment and closing costs. The bill raises FHA loan limits to 140 percent, up from 110 percent, in high-cost areas. It also authorizes the HUD Secretary to approve loans as high as 170 percent for special projects. This change will benefit firms operating in such areas as Boston, New Jersey, New York and other areas where the costs of land, buildings and development are too high to qualify for HUD insurance. The homeownership provisions are expected to provide grants of roughly $5,000 to an estimated 40,000 homebuyers annually. NAA/NMHC applaud Congress for taking a balanced approach to housing policy through this legislation that devotes resources to both rental mad for-sale housing.