Housing Group Proposal Tries to Jumpstart Multifamily

To jump start multifamily projects that depend on low-income housing tax credits, the Mortgage Bankers Association and other housing groups are recommending a program that would provide 4.5% financing. "Under our proposal, the Treasury Department would purchase mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae that are backed by loans on properties assisted by the LIHTC program," according to a letter to House and Senate Democratic leaders that are working on the economic stimulus package. Under this approach, "Treasury would agree to purchase the loans at a 4.5% note rate," the Jan. 13 letter says. The eight housing groups, including the National Apartment Association and National Multi Housing Council, point out that many projects to build and renovate affordable rental housing are stalled due to the drop in the value of the tax credits and other market factors. But the low cost financing would "reduce debt service costs" and allow a number of these developments to move forward, create jobs and increase the supply of affordable housing, according to the proponents.