Bill Clinton will not permit interest rates and inflation to get out of hand and endanger housing initiatives, asserted Marc A. Weiss, a senior adviser to the president-elect.
"You'll never see an occurrence of very high Interest rates." said Weiss. who Is expected to be part of the Clinton transition team and. probably. a part of the new administration. "He will keep interest rates and inflation in check."
Weiss, a professor at Columbia University and director of that institution's Real Estate Development Research Center, sought in an interview to reassure the real estate industry that the housing initiatives from the Clinton administration will not be frustrated by soaring interest rates as happened under jimmy Carter.
Those initiatives. said Weiss. will include strengthening the Federal Housing Administration, expanding community development block grants and making permanent the low-income housing tax credit and the tax exemption for state and local mortgage revenue bonds.
"A lot of the effort will be strengthening management and staff at the FHA," said Weiss. "A Clinton administration will also look at some new approaches to underwriting, including risk-sharing and reinsurance, lower down payments with credit counseling and extending the size of mortgages that can be insured beyond what the housing bill did.'
The Housing and Community Development Act and the appropriations bill for the Department of Housing and Urban Development. both signed by President Bush, increased limits on FItA-insured loans to 95% of an area's median home price up to 75% of the loan limits of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation. That works out to a limit of $151,725 compared with the former FHA cap of $124,875.
A major part of producing enough affordable housing will be an increase of funding to the multifamily market, Weiss said. He praised the report of the National Task Force on Affordable Housing and said a Clinton HUD would work with the group, now called the Multifamily Housing Institute, to implement their recommendations. This includes working with state housing finance agencies to develop a secondary market for multifamily housing.
He said it is possible to overcome the current management morass in the HUD multifamily program, which has left Fannie Mae as the only significant source of funds for multifamily housing. 'The Bush years will be the low point,' he promised.
Weiss said he isn't concerned that many housing experts who served previous Democratic administrations would be reluctant to take substantial pay cuts from their current Jobs as lawyers and investment advisers to Join the new administration.
"I know many talented people who are really excited about serving in the federal government to make a contribution to solving the housing problems," he said.