The Federal Housing Administration multifamily program is slated to shut down in August unless Congress provides HUD with an additional $5 billion loan commitment authority.
Department of Housing and Urban Development secretary Shaun Donovan has been warning House and Senate appropriators that a shutdown will stop the construction of 15,000 new multifamily rental units and 120 health care facilities.
Many of these projects are “shovel ready,” he said, and in some cases the holes have been dug.
"We are talking about 22,000 jobs that could be created by the additional $5 billion in commitment authority,” Donovan said at an April 24 meeting of mortgage bankers. “It would be nuts not to give us this additional commitment authority,” he added.
Industry groups supporting HUD’s request are still hopeful appropriators will come through and provide the
The HUD secretary noted that the additional commitment authority would also allow FHA to refinance existing multifamily loans, which lowers FHA’s risk profile and saves taxpayers money over the long term.
Congress provided HUD with $25 billion in loan commitment authority for fiscal year 2013, which ends Sept. 30.
Meanwhile, HUD has announced a consolidation of its 50 multifamily field offices. Over the next two to three years, HUD plans to reduce the number of field offices to 10.
