A Senate bill, the Housing Affordability Act, introduced by Senators Ruben Gallego (D-AZ) and Dave McCormick (R-PA), is an attempt to increase affordable housing stock by updating multifamily loan limits under Title II of the National Housing Act.
“By updating a nearly two-decade-old loan limit, the Housing Affordability Act will expand access to affordable loans for building multifamily housing and ultimately bring down housing costs,” said Gallego in prepared remarks.
Initially, the limits were intended to keep the Department of Housing and Urban Development from subsidizing luxury construction, according to Politico Pro. With rising prices in the U.S., many areas saw more of their housing be automatically rated as “high-cost areas.”
Mortgage Bankers Association Chief Executive Bob Broeksmit called the attempt a “long-overdue increase” and predicted that it would increase the production and number of rental housing units.
If the bill is passed into law, starting July 1, 2025, the limits would be calculated “using the percentage change in the Price Deflator Index of Multifamily Residential Units Under Construction released by the Bureau of the Census from March of the previous year to March of the year in which the adjustment is made,” as the act states.
As an example, one part of the current law sets limits of $38,025 per family unit without a bedroom; $42,120 per one-bedroom unit; $50,310 for two-bedroom units; $62,010 for three-bedroom units; and $70,200 for four or more bedrooms, not to exceed $17,460 per space. Somewhat higher limits are possible for “elevator-type structures”: $43,875 for no bedroom; $49,140 for one bedroom; $60,255 for two bedrooms; $75,465 for three bedrooms; and $85,328 for four or more bedrooms.
Under the bill, limits would expand to $167,310 per studio unit; $185,328 per one-bedroom unit; $221,364 for two-bedroom units; $272,844 for three-bedroom units; and $308,880 for four or more bedrooms, with the not-to-exceed-$17,460 part struck. For “elevator-type structures, the numbers climb to $193,050 for studios; $216,216 for one bedroom; $265,122 for two bedrooms; $332,046 for three bedrooms and $375,443 for four bedrooms.
The act’s sponsors claim that among other organizations that endorse the legislation are the National Association of Home Builders; National Association of Realtors; National Multifamily Housing Council; National Housing Conference; National Apartment Association; and Institute of Real Estate Management.
The bill faces some hurdles. There does not seem to be a current House version of the bill. The legislation would have to pass both parts of Congress at a time when legislators are busy with passing budgets and concerns remain over the country’s economy.
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