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WASHINGTON, DC-Affordable housing has gotten a shot in the arm with Congress’s passage of the FHA Downpayment Simplification Act of 2002 last week. While much of the legislation pertains to simplifying the buying of single-family homes, it also eases the burden for developers seeking to build affordable multifamily rental housing.

The bill calls for the US Department of Housing and Urban Development to annually index multi-family mortgage limits to the consumer price index, thus paving the road for more building of low- and moderate-income apartments in typically high-cost areas. “Now the mortgage limits in all areas of the country will increase with the consumer price index, allowing the limits to more closely reflect the actual cost of building apartments,” Mortgage Bankers Association of America senior VP Cheryl Patton Malloy tells GlobeSt.com.

Malloy goes on to say that, “before the 25% increase approved last year, the loan limits had not been increased for 10 years, making it impossible to build apartments with FHA insurance–and these are usually moderate income apartments–in many areas of the country.” The index adjustment, however, does not take effect until January 2004.

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