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WASHINGTON, DC-The Mortgage Bankers Association of America wants Congress to rethink its monetary approach to affordable housing, and yesterday, the group let its feelings be known on Capitol Hill. The MBA called on lawmakers to change the way the dollar amount for the programs is determined.

The group also urged Congress to restart the government’s multifamily mortgage-insurance programs, a move spokespeople for the association say will help address the “current critical nationwide shortage of affordable rental housing.” The move follows Congress’s decision to drop additional fiscal year 2001 funding for the government insurance programs that back affordable-housing development.

In a prepared statement, MBA officials explain that the group “is seeking changes in the assumptions used by the US Department of Housing and Urban Development and the White House Office of Management and Budget to calculate the so-called credit-subsidy formulas for FHA multifamily insurance programs. The subsidy serves as a loan-loss reserve for insurance issued by FHA that protects multifamily lenders against multimillion-dollar loan defaults.”

“Currently, adequate credit subsidy is required to run the FHA multifamily insurance programs, which is critical to the development of much-needed multifamily housing,” says Mike Petrie, chairman of MBA’s Commercial Real Estate Finance/Multifamily Board of Governors. “Without the credit subsidy, projects will not be built, jobs will not be created and moderate-income families will continue to have a hard time finding affordable rental housing. Indeed, we’ve already seen the adverse affects of miscalculating the credit subsidy.”

The MBA claims that development of more than 50,000 rental units in 33 states and DC stopped in the spring when the FHA ran out of fiscal 2001 subsidies.

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