Congress passed a housing bill last week that will promote housing affordability and expand rental housing and homeownership opportunities. The FHA Downpayment Simplification Act of 2002 passed during a special lame-duck session and has been one of the top priorities of the NAHB (National Association of Home Builders.
"We worked tirelessly to with leaders of both chambers of Congress in order to forge a bipartisan consensus to move this vital housing bill along," says NSAHB president Gary Garczynski, a home builder/developer from Virginia. The bill is expected to be signed into law by President Bush.
"This is a major step forward," says Dave Ledford, vice president for housing finance at the NAHB.
The legislation has several provisions designed to enhance housing affordability.
Last year, the NAHB convinced Congress to increase FHA multifamily mortgage limits by 25%. The step was apparently not enough, since the adjustment only accounted for the inflation in construction and land costs during the previous decade. The NAHB then sought o secure indexation for the program.
"The indexing mechanism approved by Congress ensures that FHA multifamily loan limits will not again lag behind and impede the use of the FHA multifamily programs," says Garczynski.
The new housing bill will further enhance housing affordability by permanently extending the FHA single-family down payment simplification process, which will make it easier for low and moderate-income families to obtain the necessary financing to purchase a home.
"The simplified formula reduces up-front cash requirements for many prospective home buyers, a major factor for those on the brink of affordability. This will enable thousands of families who otherwise could not qualify for a mortgage to achieve the American dream of homeownership," says Garczynski.
The NAHB represents over 205,000 members involved in home building. NAHB’s builder members will construct roughly 80% of the nearly 1.7 million new housing units projected for 2002.