The House of Representatives on Dec. 11 was considering a comprehensive financial regulatory reform measure (HR 4173) that would address consumer credit protections and establish sweeping rating agency, derivatives, banking and financial institution regulatory changes.
As written, the measure represents a significant victory for NAA/NMHC. The reform bill corrects a "forced foreclosure" mechanism included in a mortgage reform provision (HR 1728) that passed the House in 2009. That legislation would have allowed the government to prematurely force apartment properties into bankruptcy, forcing a property sale to a new buyer who agrees to retain a long-term affordable housing interest in the property.
Instead, the financial regulatory reform bill directs the U.S. Department of Housing and Urban Development (HUD) to develop a program to protect residents of selected at-risk multifamily housing properties by providing new equity to address deferred property issues and establishing long-term sustainable financing for such properties based on current rental income and operating and replacement reserves. This bill could provide solutions for existing owners and preserve existing multifamily rental housing properties.
Thanks to extensive dialogue between NAA/NMHC and key House lawmakers, the measure specifies that any transfer of at-risk properties requires the agreement of owners. The Senate is still developing proposed financial reform legislation.