Wednesday, March 14, 2001

Boost sought for rental units

FHA rules may be in the way

By Derrick DePledge
Enquirer Washington Bureau

        WASHINGTON — The Federal Housing Administration should insure larger loans for multifamily rental housing to encourage more affordable units in cities such as Cincinnati, a coalition of bankers, home builders, Realtors and labor leaders said Tuesday.

        A study of 22 cities selected by the coalition found that many, including Cincinnati, did not have a single FHA-insured loan for multifamily rental housing last year despite a strong demand for affordable units.

        In Cincinnati, as many as 115,260 families devote more than half of their income to housing costs or live in inadequate housing.

        “We are, despite our successes, facing a critical affordable housing shortage in this country,” said Andrew Woodward, president of the Mortgage Bankers Association of America, which formed the coalition with the National Association of Home Builders, the U.S. Conference of Mayors, the AFL-CIO Housing Investment Trust and other groups.

        The FHA insures loans for mortgages on apartments based on a formula that varies among regions of the country.

        The coalition said the loan limits, which were set by Congress and last updated in 1992, should be increased by at least 25 percent to keep up with land and construction costs.

        With such an increase, the loan limit for FHA insurance in Cincinnati would move from $69,780 to $87,226 for two-bedroom units. The FHA also has the discretion in certain markets to offer insurance on loans of up to 240 percent more than the base amount.

        Ed Tellings, who directs multifamily housing issues for the U.S Department of Housing and Urban Development's field office in Columbus, said the FHA's loan limits have little to do with the lack of affordable rental housing in Cincinnati.

        Many developers, he said, are either unaware of FHA assistance or are wary of the bureaucracy that can come with the federal government's involvement. He said he doesn't recall an FHA-insured loan for multifamily rental housing in Cincinnati in at least two years.


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