WASHINGTON -- The Department of Housing and Urban Development will attempt to revive its moribund multifamily loan insurance program over the next two years by testing the idea of letting state and local governments share the risk of insuring the loans.

HUD officials are calling the new risk-sharing pilot program the centerpiece of their attempts to spur construction of multifamily housing units. If successful, the plan could ultimately trigger a resurgence in the issuance of tax-exempt multifamily housing bonds, municipal lobbyists said.

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