FHA Multifamily Shutdown Averted
Political Insider
Quick action by NAA/NMHC and an industry coalition has helped avert a potential shutdown of the Federal Housing Administration (FHA) multifamily loan program. In July, FHA announced that it was close to exhausting its $15 billion in multifamily credit subsidy for FY 2010, which would have caused the program to stop issuing commitments until the next fiscal year starts on Oct. 1. The program has experienced dramatic increases in application volume as other credit sources remain sidelined after the global financial crisis.
FHA Commissioner David Stevens issued a memo at the time outlining the situation and identifying the U.S. Department of Housing and Urban Development’s (HUD) planned response. On August 4—just two days before it was set to adjourn until mid-September—the Senate unanimously passed an emergency standalone bill (HR 5872) providing an additional $5 billion in credit authority. This follows House passage of an identical bill on July 28.
President Obama signed the measure into law on Aug. 11. As a result, the FHA multifamily programs are expected to have enough credit subsidy to continue issuing commitments without interruption.
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