WASHINGTON The Mortgage Bankers Association said Wednesday that it is urging the Senate to approve legislation to restart the Federal Housing Administrations multifamily mortgage insurance program.
The announcement came five days after the Senate Appropriations Committee passed a fiscal 2001 supplemental spending bill that would release $40 million in credit subsidy, also known as loan-loss reserves, for the program.
The FHA ran out of credit subsidy in April, bringing the program to a halt and stopping development on about 53,000 rental units that the program insured.
Though Congress passed an emergency supplemental spending bill in December to continue insuring some FHA multifamily loans, the Bush administration has declined to declare an emergency to release the funds. The Senate bill would remove the need for the declaration.
These funds are critical to alleviating the current shutdown in the multifamily new-construction and substantial-rehabilitation programs, said Michael F. Petrie, president of P/R Mortgage and chairman of MBAs Commercial Real Estate Finance/Multifamily Board of Governors, in a press statement.
The House earlier approved its version of the supplemental spending bill with a provision related to the FHA multifamily loan insurance program.
While the House bill would also appropriate $40 million for the FHA credit subsidy, it would tie the funds to an increase in the multifamily loan insurance premiums, a proposal the MBA opposes.