The Senate has passed H.R. 5872, a bill to increase the Federal Housing Administration's (FHA) multifamily commitment authority, and H.R. 5981, which would allow FHA to increase its annual premiums for its single family program. Both bills passed the Senate last night and will now go to the President for his signature.
H.R. 5872, which passed the House last week, increases FHA's commitment authority for its multifamily insurance programs by $5 billion for the remainder of the fiscal year. Without this increase, FHA would have exhausted its current authority sometime in mid-August and would have been forced to stop issuing any commitments to insure the loans in their current pipeline of applications until the next fiscal year, which begins October 1.
HR 5891 will permit FHA to increase its annual premiums, raising the statutory cap from 0.55 percent to 1.55 percent. The legislation is nearly identical to one of the key provisions of the broader FHA Reform Act, which passed the House in June but has yet to be considered by the Senate. The House had passed HR 5891 July 30.
"FHA's multifamily programs have been a critical source of funding to build and renovate multifamily and rental housing during the recent credit crunch," said Robert E. Story, Jr., CMB, Chairman of MBA (Mortgage Bankers Assn). He continued, "While premium increases are never ideal, this bill [HR 5891] was necessary to help improve the strength and stability of FHA's single family programs. We are encouraged that FHA Commissioner Stevens has indicated he may not need to raise premiums to the maximum, and we believe that that a small increase in the annual premium, coupled with a decrease in FHA's upfront premium, will help stabilize FHA while lowering closing costs for many borrowers."
Multifamily housing is a very important facet of our Hawaii Kai lifestyle and, in fact, throughout the state. These bills will help ensure the continued availability of financing for multifamily and single family housing and stabilize our real estate market. Contact me with your questions on how to buy a multifamily home, and let's look at some properties while the rates are low.
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