[Congressional Record Volume 148, Number 108 (Thursday, August 1, 2002)]
[Senate]
[Pages S7907-S7908]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. CORZINE (for himself, Mr. Carper, Mr. Ensign, Mr. Schumer, 
        and Mr. Allard):
  S. 2841. A bill to adjust the indexing of multifamily mortgage 
limits, and for other purposes; to the Committee on Banking, Housing, 
and Urban Affairs.
  Mr. CORZINE. Mr. President, today I am introducing legislation, the 
FHA Multifamily Housing Loan Limit Improvement Act, to expand the 
supply of affordable housing by increasing the Federal Housing 
Administration's multifamily housing loan limit to account for 
inflation.
  Providing access to decent, safe, affordable housing for individuals 
and families remains an enormous challenge for our Nation. Throughout 
the country, rising construction costs have resulted in shortage of 
affordably priced rental units. In fact, the shortage of affordable 
housing should be considered nothing short of a crisis. After all, 
housing is among the most basic of human needs, and it is critically 
important for all American communities.
  The Federal Housing Administration, FHA, was established as part of a 
national commitment to providing affordable housing, particularly for 
those most in need. Overall, the FHA, through its various initiatives, 
has been successful in providing increased access to housing. But as 
the crisis of affordable housing has grown, so has the need for 
Congress and the Department of Housing and Urban Development, HUD, to 
promote increased production of affordable housing.
  That is why I am pleased to join with Senators Carper, Ensign and 
Schumer in introducing this legislation to increase the production and 
availability of affordable housing for American families. The bill 
would improve upon legislation I introduced last year, ``The FHA 
Multifamily Housing Loan Limit Adjustment Act,'' which Congress 
approved last year as part of the VA-HUD Appropriations bill. That 
legislation increased by twenty-five percent the statutory limits for 
multifamily project development loans that are insurable by the FHA. 
The change reflected the increased costs associated with the production 
of multifamily units since 1992, the last time those limits were 
revised upwards.
  In other words, it had taken Congress ten years to modify the 
underlying statute to account for rising prices and simply maintain the 
effectiveness of the program. That is too long. The legislation we are 
introducing today would ensure that it does not take another decade or 
longer to assist those who need affordable housing.
  This bill is simple, it ensures that the insurable FHA loan limit 
amounts, as adjusted under ``The FHA Multifamily Loan Adjustment Act,'' 
would keep pace with economic growth by indexing them each year to the 
Annual Construction Cost Index, issued annually by the Census Bureau.
  This bill also promotes the production of affordable housing in 
another important way, by promoting the development of affordable 
housing in high-cost cities like Newark, NJ, New York, Philadelphia and 
San Francisco. Currently in those communities, the cost of living is so 
high that the FHA insurance program is rendered largely ineffective.
  This bill improves the FHA multifamily program by adjusting its 
statutory limits to promote increased housing production in high-cost, 
primarily urban, communities.
  There is a very real need for Congress to address the shortage of 
affordable housing. A report released last year by the Center for 
Housing Policy, ``Housing America's Working Families,'' documented the 
severity of this need. The report found that more than fourteen million 
people faced severe housing needs because of the lack of affordable 
housing. That number may well be higher now.
  This bill will provide the proper incentive for public/private 
investment in affordable housing in communities throughout America and 
spur new production of cooperative housing projects, rental housing for 
the elderly, new construction or substantial rehabilitation of 
apartments by for- and non-profit entities, condominium developments 
and refinancing of rental properties.
  In short, this bill is good housing policy. That is why the National 
Association of Home Builders, the National Association of Realtors and 
the Mortgage Bankers Association endorse the legislation, along with 
other housing and community advocates.
  I hope that my colleagues will support this legislation and I ask 
unanimous consent that the text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed the 
Record, as follows:

                                S. 2841

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION. 1. SHORT TITLE.

       This Act may be cited as the ``FHA Multifamily Housing Loan 
     Limit Improvement Act''.

     SEC. 2. INDEXING OF MULTIFAMILY MORTGAGE LIMITS.

       (a) Section 207 Limits.--Section 207(c)(3) of the National 
     Housing Act (12 U.S.C. 1713(c)(3)) is amended--
       (1) by striking ``11,250'' and inserting ``$17,460'';
       (2) by inserting before ``; and except that'' the 
     following: ``; except that the Secretary shall adjust each 
     such dollar amount limitation set forth in this paragraph (as 
     such limitation may have been previously adjusted pursuant to 
     this paragraph) effective January 1 of each year, beginning 
     in 2003, in accordance with the percentage increase, if any, 
     during the 12-month period ending with the preceding October, 
     in the Annual Construction Cost Index of the Bureau of the 
     Census of the Department of Commerce''; and
       (3) by inserting after ``foregoing dollar amount 
     limitations contained in this paragraph'' the following: 
     ``(as such limitations may have been previously adjusted 
     pursuant to this paragraph)''.
       (b) Section 213 Limits.--Section 213(b)(2) of the National 
     Housing Act (12 U.S.C. 1715e(b)(2)) is amended--
       (1) by striking ``$38,025'', ``$42,120'', ``$50,310'', 
     ``$62,010'', and ``$70,200'', and inserting ``$41,207'', 
     ``$47,511'', ``$57,300'', ``$73,343'', and ``$81,708'', 
     respectively;
       (2) by striking ``$49,140'', ``$60,255'', ``$75,465'', and 
     ``$85,328'', and inserting ``$49,710'', ``$60,446'', 
     ``$78,197'', and ``$85,836'', respectively;
       (3) by inserting after the colon at the end of the first 
     proviso the following: ``Provided further, That the Secretary 
     shall adjust each such dollar amount limitation set forth in 
     this paragraph (as such limitation may have been previously 
     adjusted pursuant to this paragraph) effective January 1 of 
     each year, beginning in 2003, in accordance with the 
     percentage increase, if any, during the 12-month period 
     ending with the preceding October, in the Annual Construction 
     Cost Index of the Bureau of the Census of the Department of 
     Commerce:''; and
       (4) by inserting after ``foregoing dollar amount 
     limitations contained in this paragraph'' the following: 
     ``(as such limitations may have been previously adjusted 
     pursuant to this paragraph)''.
       (c) Section 220 Limits.--Section 220(d)(3)(B)(iii) of the 
     National Housing Act (12 U.S.C. 1715k(d)(3)(B)(iii)) is 
     amended--
       (1) by inserting after ``foregoing dollar amount 
     limitations contained in this clause'', the first place such 
     phrase appears, the following: ``(as such limitations may 
     have been previously adjusted pursuant to this clause)''.
       (2) by inserting after ``Provided,'' the following: ``That 
     the Secretary shall adjust each such dollar amount limitation 
     set forth in this clause (as such limitation may have been 
     previously adjusted pursuant to this clause) effective 
     January 1 of each year, beginning in 2003, in accordance with 
     the percentage increase, if any, during the 12-month period 
     ending with the preceding October, in the Annual Construction 
     Cost Index of the Bureau of the Census of the Department of 
     Commerce: Provided further,''; and
       (3) by striking ``(as determined after the application of 
     the preceding proviso)'' and inserting ``(as such limitations 
     may have been previously adjusted pursuant to the preceding 
     proviso and as determined after application of any percentage 
     increase authorized in this clause relating to units with 2, 
     3, 4, or more bedrooms)''.
       (d) Section 221(d)(3) Limits.--Section 221(d)(3)(ii) of the 
     National Housing Act (12 U.S.C. 1715l(d)(3)(ii)) is amended--
       (1) by inserting before ``; and except that'' the 
     following: ``; except that the Secretary shall adjust each 
     such dollar amount limitation set forth in this clause (as 
     such limitation may have been previously adjusted pursuant to 
     this clause) effective January 1 of each year, beginning in 
     2003, in accordance with the percentage increase, if any, 
     during the 12-month period ending with the preceding October, 
     in the Annual Construction Cost Index of the Bureau of the 
     Census of the Department of Commerce''; and
       (2) by inserting after ``foregoing dollar amount 
     limitations contained in this clause'' the following: ``(as 
     such limitations may have been previously adjusted pursuant 
     to this clause)''.

[[Page S7908]]

       (e) Section 221(d)(4) Limits.--Section 221(d)(4)(ii) of the 
     National Housing Act (12 U.S.C. 1715l(d)(4)(ii)) is amended--
       (1) by inserting before ``; and except that'' the 
     following: ``; except that the Secretary shall adjust each 
     such dollar amount limitation set forth in this clause (as 
     such limitation may have been previously adjusted pursuant to 
     this clause) effective January 1 of each year, beginning in 
     2003, in accordance with the percentage increase, if any, 
     during the 12-month period ending with the preceding October, 
     in the Annual Construction Cost Index of the Bureau of the 
     Census of the Department of Commerce''; and
       (2) by inserting after ``foregoing dollar amount 
     limitations contained in this clause'' the following: ``(as 
     such limitations may have been previously adjusted pursuant 
     to this clause)''.
       (f) Section 231 Limits.--Section 231(c)(2) of the National 
     Housing Act (12 U.S.C. 1715v(c)(2)) is amended--
       (1) by inserting before ``; and except that'' the 
     following: ``; except that the Secretary shall adjust each 
     such dollar amount limitation set forth in this paragraph (as 
     such limitation may have been previously adjusted pursuant to 
     this paragraph) effective January 1 of each year, beginning 
     in 2003, in accordance with the percentage increase, if any, 
     during the 12-month period ending with the preceding October, 
     in the Annual Construction Cost Index of the Bureau of the 
     Census of the Department of Commerce''; and
       (2) by inserting after ``foregoing dollar amount 
     limitations contained in this paragraph'' the following: 
     ``(as such limitations may have been previously adjusted 
     pursuant to this paragraph)''.
       (g) Section 234 Limits.--Section 234(e)(3) of the National 
     Housing Act (12 U.S.C. 1715y(e)(3)) is amended--
       (1) by inserting before ``; except that'' the second place 
     such phrase appears the following: ``; except that the 
     Secretary shall adjust each such dollar amount limitation set 
     forth in this paragraph (as such limitation may have been 
     previously adjusted pursuant to this paragraph) effective 
     January 1 of each year, beginning in 2003, in accordance with 
     the percentage increase, if any, during the 12-month period 
     ending with the preceding October, in the Annual Construction 
     Cost Index of the Bureau of the Census of the Department of 
     Commerce'';
       (2) by inserting after ``each of the foregoing dollar 
     amounts'' the following: ``(as such amounts may have been 
     previously adjusted pursuant to this paragraph)''; and
       (3) by inserting after ``foregoing dollar amount 
     limitations contained in this paragraph'' the following: 
     ``(as such limitations may have been previously adjusted 
     pursuant to this paragraph and increased pursuant to the 
     preceding clause)''.

     SEC. 2. HIGH-COST AREAS.

       (a) Section 207 Limits.--Section 207(c)(3) of the National 
     Housing Act (12 U.S.C. 1713(c)(3)) is amended--
       (1) by striking ``140 percent'' and inserting ``170 
     percent''; and
       (2) by striking ``110 percent'' and inserting ``140 
     percent''.
       (b) Section 213 Limits.--Section 213(b)(2) of the National 
     Housing Act (12 U.S.C. 1715e(b)(2)) is amended--
       (1) by striking ``140 percent'' and inserting ``170 
     percent''; and
       (2) by striking ``110 percent'' and inserting ``140 
     percent''.
       (c) Section 220 Limits.--Section 220(d)(3)(B)(iii) of the 
     National Housing Act (12 U.S.C. 1715k(d)(3)(B)(iii)) is 
     amended--
       (1) by striking ``140 percent'' and inserting ``170 
     percent''; and
       (2) by striking ``110 percent'' and inserting ``140 
     percent''.
       (d) Section 221(d)(3) Limits.--Section 221(d)(3)(ii) of the 
     National Housing Act (12 U.S.C. 1715l(d)(3)(ii)) is amended--
       (1) by striking ``140 percent'' and inserting ``170 
     percent''; and
       (2) by striking ``110 percent'' and inserting ``140 
     percent''.
       (e) Section 221(d)(4) Limits.--Section 221(d)(4)(ii) of the 
     National Housing Act (12 U.S.C. 1715l(d)(4)(ii)) is amended--
       (1) by striking ``140 percent'' and inserting ``170 
     percent''; and
       (2) by striking ``110 percent'' and inserting ``140 
     percent''.
       (f) Section 231 Limits.--Section 231(c)(2) of the National 
     Housing Act (12 U.S.C. 1715v(c)(2)) is amended--
       (1) by striking ``140 percent'' and inserting ``170 
     percent''; and
       (2) by striking ``110 percent'' and inserting ``140 
     percent''.
       (g) Section 234 Limits.--Section 234(e)(3) of the National 
     Housing Act (12 U.S.C. 1715y(e)(3)) is amended--
       (1) by striking ``140 percent'' and inserting ``170 
     percent''; and
       (2) by striking ``110 percent'' and inserting ``140 
     percent''.
  Mr. CARPER. Mr. President, I am very pleased to join today with my 
distinguished colleagues from New Jersey, Nevada, and New York to 
introduce legislation to index the Federal Housing Administration's, 
FHA, multifamily loan limits.
  Last year, Senator Corzine and I introduced similar legislation that 
raised the FHA multifamily loan limits, which had not been increased 
since 1992 despite a 23 percent increase in the Annual Construction 
Cost Index. Senators Mikulski and Bond included this increase in last 
year's VA-HUD appropriations legislation. I am pleased that these 
limits were increased last year, however, an important piece of the 
original legislation was left undone. While the FHA loan limits were 
increased, they were not indexed. Construction costs will continue to 
rise, and the multifamily loan limits should be indexed, just like the 
FHA single-family loan limits.
  Affordable housing continues to be a problem in this country. Over 
the July recess, I held a series of housing summits in Delaware to hear 
from Delawareans about the lack of affordable housing. In each county, 
I heard that working families in Delaware are having difficulty finding 
affordable housing. This shortage of affordable housing also comes at a 
time of limited federal 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 housing production and 
substantial rehabilitation. This bill modifies a current federal 
program, FHA multifamily insurance, to make that program more 
effective.
  In the next Congress, I hope to be able to address the affordable 
housing problem in a more comprehensive manner. In the meantime, I 
believe Congress can take some incremental steps to address the 
shortage of affordable housing.
  I ask my colleagues to join Senators Corzine, Ensign, and Schumer and 
me to increase these multifamily loan limits so that more working 
families will have access to affordable housing.
  Mr. ENSIGN. Mr. President, I rise today, along with my good friend, 
the Senator from New Jersey, to introduce a bill that will help solve 
the affordable housing crisis that is facing this Nation.
  There is a dramatic shortage of rental housing that is affordable to 
low and moderate income working families. FHA multifamily insurance 
programs are designed to stimulate the construction, rehabilitation and 
preservation of properties by insuring lenders against loss in 
financing first mortgages. The programs assist both the private and the 
public sectors towards the goal of providing affordable housing to 
those that otherwise may not be able to afford it.
  Last year, in a remarkable step, Congress granted a 25 percent 
increase in the FHA multifamily loan limits. The new loan limits are 
one great remedy to the affordable housing crisis facing our nation, 
but this alone does not do enough.
  Unfortunately, without additional legislation, the loan limits will 
again be outpaced by inflation and today's growing construction costs.
  The legislation that we are introducing solves this problem by 
indexing the multifamily loan limits to the annual construction costs 
index of the Bureau of the Census. This will allow loan limits to 
increase automatically, as costs increase. Without such a fix, the FHA 
multifamily loan program will again be limited in its ability to 
stimulate the development of affordable housing.
  This legislation will help halt the growing shortage of affordable 
rental housing faced by millions of Americans and give builders and 
lenders the confidence that they will be able to use the programs in 
their communities every year, even as construction and land costs rise 
over time.
  Additionally, this legislation raises the loan limits in high-cost 
areas. This will allow several major urban markets to take advantage of 
the new FHA multifamily insurance programs, and to provide much needed 
new affordable housing to low and moderate income families.
  I believe this legislation is an important step in our ongoing battle 
to ensure that each American has access to affordable housing. I would 
like to once again thank the Senator from New Jersey, Mr. Corzine, for 
his hard work on this bill, and for recognizing the significant effect 
this legislation will have for many low and moderate income families by 
dramatically increasing their access to affordable housing.
                                 ______