[Congressional Record Volume 147, Number 96 (Wednesday, July 11, 2001)]
[Senate]
[Pages S7496-S7497]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE (for himself, Mr. Carper, and Mr. Schumer):
  S. 1163. A bill to increase the mortgage loan limits under the 
National Housing Act for multifamily housing mortgage insurance; to the 
Committee on Banking, Housing, and Urban Affairs.
  Mr. CORZINE. Mr. President, I am pleased to join with my 
distinguished colleague, Senator Carper, in introducing legislation, 
the FHA Multifamily Housing Loan Limit Adjustment Act, that would 
improve access to affordable housing.
  Our Nation currently faces a critical housing shortage. A report 
released recently by the Center for Housing Policy, ``Housing America's 
Working Families,'' documented the overwhelming need for affordable 
housing. The report indicates that in 1997, nearly 14 million families 
had a critical housing need, meaning they either lived in substandard 
housing conditions or spent

[[Page S7497]]

more than half their monthly income on the cost of housing. The FHA 
Multifamily Housing Loan Limit Adjustment Act would provide America's 
working families with increased access to affordable rental housing.
  The bill is simple, it increases by 25 percent the statutory limits 
for multifamily project loans that can be insured by the FHA. This 
increase reflects the increased costs associated with the production of 
multifamily units since 1992, when these limits were last revised. The 
bill also would index the loan limits for inflation and increases to 
the Annual Construction Cost Index, which is published by the Census 
Bureau.
  Rising construction costs have resulted in a shortage of moderately 
priced affordable rental units. Rent increases now exceed inflation in 
all regions of the country, and new affordable rental units have become 
increasingly harder to find. Because of the current dollar limits on 
loans, FHA insurance cannot be used to help finance construction in 
high-cost urban areas such as the New York/New Jersey metropolitan 
area, Philadelphia and San Francisco.
  By increasing the limits on loans for rental housing we will create 
more incentives for public/private investment in communities through 
America and spur the new production of cooperative housing projects, 
rental housing for the elderly, and new construction or substantial 
rehabilitation of apartments by for- and non-profit entities.
  Late last year, Congress sought, through a number of initiatives, to 
implement programs aimed at increasing the production of affordable 
housing for the millions of Americans who currently face critical 
housing needs. For example, we expanded the Low Income Housing Tax 
Credit, the one Federal program designed to produce new housing. We 
also increased the supply of housing vouchers. However, these programs 
were targeted largely at families with very low incomes. Currently, 
there are no programs designed specifically to provide access to 
affordable rental housing for America's working middle class, the 
people who serve as the engine of our nation's economy. Far too many of 
these individuals, including vital municipal workers like teachers, 
nurses and police officers, are struggling to gain access to affordable 
housing even remotely near where they work.
  Without this much-needed adjustment to the FHA multifamily loan 
limits, access to affordable housing for our working-citizens will 
continue to lag, thousands of more families will join the 14 million 
people who currently face severe housing needs and our nation's economy 
will suffer.
  This bill is modeled after bipartisan legislation introduced in the 
House by my colleague from New Jersey, Congresswoman Marge Roukema, and 
Congressman Barney Frank of Massachusetts. The bill is supported by 
housing and community advocates and has also been endorsed by the 
National Association of Home Builders, the National Association of 
Realtors, and the Mortgage Bankers Association.
  I hope my Senate colleagues will support the legislation and help us 
ensure that America's working families have access to affordable 
housing.
  Mr. CARPER. Mr. President, I am very pleased to join today with my 
distinguished colleague from new Jersey to introduce the FHA 
Multifamily Housing Mortgage Loan Limit Adjustment Act of 2001.
  A recent report published by the National Housing Conference's Center 
for Housing Policy found that in 1997, nearly 14 million families 
either lived in substandard housing or spent more than half of their 
monthly income on housing costs. This affordable housing shortage also 
comes at a time of limited resources. Thus, we have to find the best 
use of each dollar at our disposal, as well as the most effective use 
of existing Federal programs to stimulate new production and 
substantial rehabilitation.
  The Federal Housing Administration's, FHA, multifamily mortgage 
insurance is an important financing device for housing production. 
Unfortunately, production through this public/private partnership has 
been low in recent years. One of the reasons for FHA's absence from the 
rental housing market is that the multifamily loan limits have not been 
increased since 1992. While the annual Construction Cost Index, 
published by the Census Bureau, has increased over 23 percent since 
1992, FHA's multifamily loan limits have remained static.
  These rising construction costs have contributed to FHA's inability 
to be a significant participant in the production of multifamily 
housing. Increasing these loan limits by 25 percent, as this 
legislation does, is something Congress can do today to address 
immediately the shortage is affordable rental housing. This bill 
modifies a current federal program, FHA multifamily insurance, to make 
that program more effective. Importantly, this legislation also indexes 
the loan limits to the Annual Construction Cost Index.
  I ask my colleagues to join with Senator Corzine and me to increase 
these multifamily loan limits so that more working families will have 
access to affordable rental housing.
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