[Congressional Record Volume 155, Number 130 (Tuesday, September 15, 2009)]
[House]
[Pages H9522-H9524]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                              {time}  1500
           FHA MULTIFAMILY LOAN LIMIT ADJUSTMENT ACT OF 2009

  Mr. ADLER of New Jersey. Mr. Speaker, I move to suspend the rules and 
pass the bill (H.R. 3527) to increase the maximum mortgage amount 
limitations under the FHA mortgage insurance programs for multifamily 
housing projects with elevators and for extremely high-cost areas, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 3527

       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 Loan Limit 
     Adjustment Act of 2009''.

     SEC. 2. FHA MORTGAGE AMOUNT LIMITS FOR ELEVATOR-TYPE 
                   STRUCTURES.

       (a) Amendments.--The National Housing Act is amended in 
     each of the provisions specified in subsection (b)--
       (1) by inserting ``with sound standards of construction and 
     design'' after ``elevator-type structures'' the first place 
     such term appears; and
       (2) by striking ``to not to exceed'' and all that follows 
     through ``sound standards of construction and design'' each 
     place such terms appear and inserting ``by not more than 50 
     percent of the amounts specified for each unit size''.
       (b) Provisions Amended.--The provisions of the National 
     Housing Act specified in this subsection are as follows:
       (1) Subparagraph (A) of section 207(c)(3) (12 U.S.C. 
     1713(c)(3)(A)).
       (2) Subparagraph (A) of section 213(b)(2) (12 U.S.C. 
     1715e(b)(2)(A)).
       (3) Subclause (I) of section 220(d)(3)(B)(iii) (12 U.S.C. 
     1715k(d)(3)(B)(iii)(I)).
       (4) In section 221(d) (12 U.S.C. 1715l(d))--
       (A) subclause (I) of paragraph (3)(ii); and
       (B) subclause (I) of paragraph (4)(ii).
       (5) Subparagraph (A) of section 231(c)(2) (12 U.S.C. 
     1715v(c)(2)(A)).
       (6) Subparagraph (A) of section 234(e)(3) (12 U.S.C. 
     1715y(e)(3)(A)).

     SEC. 3. FHA MORTGAGE AMOUNT LIMITS FOR EXTREMELY HIGH-COST 
                   AREAS.

       Section 214 of the National Housing Act (12 U.S.C. 1715d) 
     is amended--
       (1) in the first sentence--
       (A) by inserting ``, or with respect to projects consisting 
     of more than four dwelling units located in an extremely 
     high-cost area as determined by the Secretary'' after ``or 
     the Virgin Islands'' the first place such term appears;
       (B) by inserting ``, or to construct projects consisting of 
     more than four dwelling units on property located in an 
     extremely high-cost area as determined by the Secretary'' 
     after ``or the Virgin Islands'' the second place such term 
     appears; and
       (C) by inserting ``, or with respect to projects consisting 
     of more than four dwelling units located in an extremely 
     high-cost area as determined by the Secretary'' after ``or 
     the Virgin Islands'' the third place such term appears;
       (2) in the second sentence--
       (A) by inserting ``, or with respect to a project 
     consisting of more than four dwelling units located in an 
     extremely high-cost area as determined by the Secretary,'' 
     after ``or the Virgin Islands'' the first place such term 
     appears; and
       (B) by inserting ``, or in the case of a project consisting 
     of more than four dwelling units in an extremely high-cost 
     area as determined by the Secretary, in such extremely high-
     cost area,'' after ``or the Virgin Islands'' the second place 
     such term appears; and
       (3) in the section heading, by striking ``and the virgin 
     islands'' and inserting ``the virgin islands, and extremely 
     high-cost areas''.

     SEC. 4. EFFECTIVE DATE.

       The amendments made by this Act shall apply to mortgages 
     insured under title II of the National Housing Act after 
     September 30, 2009.

  The SPEAKER pro tempore. Pursuant to the rule, the gentleman from New 
Jersey (Mr. Adler) and the gentleman from California (Mr. Gary G. 
Miller) each will control 20 minutes.
  The Chair recognizes the gentleman from New Jersey.


                             General Leave

  Mr. ADLER of New Jersey. Mr. Speaker, I ask unanimous consent that 
all Members may have 5 legislative days in which to revise and extend 
their remarks on this legislation.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from New Jersey?
  There was no objection.
  Mr. ADLER of New Jersey. Mr. Speaker, I urge the House to pass H.R. 
3527, the FHA Multifamily Loan Limit

[[Page H9523]]

Adjustment Act of 2009. By increasing the FHA loan limits to elevator 
properties in extremely high-cost areas, H.R. 3527 will allow the FHA 
to facilitate the construction and rehabilitation of apartments, 
particularly in urban areas, where financing is not readily available 
in the current economic environment.
  I reserve the balance of my time.

                                               September 14, 2009.
     Hon. Nancy Pelosi,
     Hon. John Boehner,
     House of Representatives, Washington, DC.
       Dear Madam Speaker and Minority Leader Boehner: The 
     undersigned groups are writing to urge the House to pass H.R. 
     3527, the FHA Multifamily Loan Limit Adjustment Act of 2009. 
     By increasing the FHA loan limits for elevator properties and 
     in extremely high-cost areas, H.R. 3527 will allow FHA to 
     facilitate the construction and rehabilitation of apartments, 
     particularly in urban areas where financing is not readily 
     available in the current economic environment.
       The FHA multifamily loan limits are severely restricting 
     the ability to use FHA insurance programs to finance rental 
     housing in many urban areas. HUD data shows that, in fiscal 
     years 2007 and 2008, only three non-subsidized high-rise 
     construction/rehabilitation projects--nationwide--have been 
     endorsed for insurance with FHA. We believe this is largely 
     due to the maximum loan limits imposed by statute on the FHA 
     insurance programs, which is being addressed in H.R. 3527.
       A recent survey of major lenders shows that there are more 
     than 11,000 units in elevator structures with a mortgage 
     amount of more than $3 billion that are on hold and, when 
     H.R. 3527 is passed, should be able to move forward using the 
     FHA programs. These properties are in many urban areas across 
     the country, from Seattle and Los Angeles, to Houston, 
     Columbus and Chicago, to Boston and New York.
       Decent affordable rental housing allows working families to 
     live in stable environments and within their means and also 
     allows seniors to live in communities with appropriate 
     amenities to permit aging in place. Well-maintained and 
     attractive rental housing in turn contributes to neighborhood 
     stability.
       We urge the House to pass H.R. 3527 to provide FHA with the 
     tools it needs to facilitate the construction and 
     rehabilitation of apartments.
           Sincerely,
         American Association of Homes and Services for the Aging; 
           Enterprise Community Partners; Institute of Real Estate 
           Management; Mortgage Bankers Association; National 
           Apartment Association; National Affordable Housing 
           Management Association; National Association of Home 
           Builders; National Association of Local Housing Finance 
           Agencies; National Association of Realtors; National 
           Housing Conference; National Leased Housing 
           Association; National Low Income Housing Coalition; 
           Nation Multi-Housing Council; New York Housing 
           Conference; Stewards of Affordable Housing for the 
           Future.

  Mr. GARY G. MILLER of California. Mr. Speaker, I rise in support of 
the FHA Multifamily Loan Limit Adjustment Act. I see that Mr. Weiner is 
just walking in the door right now, so we're going to be able to have a 
very nice conversation. Welcome, Mr. Weiner. I'm very glad to have you. 
I'm honored to support your bill. This addresses the need for new 
construction or substantial rehabilitation to multifamily units in 
extremely high-cost areas of the country.
  The FHA multifamily mortgage insurance program works with private 
sector partners to expand the supply of rental housing. FHA's 
multifamily mortgage insurance programs enable qualified buyers to 
obtain long-term, fixed-rate, nonrecourse financing for multifamily 
properties that are affordable to low- and moderate-income families. 
These families include police, firefighters, teachers, entry and mid-
level service workers, among others.
  In our most expensive cities it is very difficult for these workers, 
particularly those starting out in the workforce, to find affordable 
rental housing where they work. While the FHA multifamily mortgage 
insurance program could help, because of its loan limits there were 
only three FHA-insured multifamily loans for high-rise construction or 
rehabilitation approvals in the Nation in fiscal year 2007 and 2008.
  According to the Mortgage Bankers Association, MBA, while the base 
loan limits and high-cost factors have been raised over the past 8 
years to address issues in most parts of the country, there's still 
problems concentrated in major cities where high-rise construction is 
involved. In fact, the data shows that while elevator buildings cost 45 
percent more than non-elevator structures, the current loan limits for 
these structures are less than 10 percent higher than non-elevator 
structures.
  Developers are simply unable to provide affordable housing units in 
high-cost areas because the current statutory limits for FHA mortgage 
insurance are too low for these types of structures.
  The slowdown in affordable rental housing production that is being 
enhanced by the credit crisis has resulted in a significant gap between 
the demand for and the supply of affordable rental housing.
  There is no private sector alternative to this program. The market 
served by FHA multifamily insurance does not overlap with competing 
private sector insurance.
  This bill would increase the multifamily loan limit for elevator 
buildings by up to 50 percent and give the Secretary of HUD the 
authority to increase the limit in extremely high-cost areas to 305 
percent of the base rate; similar to insurance of mortgages on property 
in States like Alaska, Guam, Hawaii, and the Virgin Islands. And I 
think Mr. Weiner and I agree--if it's good enough for Alaska, Guam, 
Hawaii, and the Virgin Islands, it's good enough for the rest of the 
United States.
  This program has a positive budgetary impact. Now this does not cost 
the Federal Government any money. Making money for the taxpayers is 
what we're looking at.
  Looking at the President's fiscal year 2010 budget, the multifamily 
insurance programs that relate to these loans limits is projected to 
make a profit--I repeat, a profit--on new loans insured in the fiscal 
year budget of $93 million. In fact, over the years, FHA multifamily 
loans have consistently made a profit for the taxpayers.
  Under the bill, 52 projects with over 11,000 units valued at $3 
billion that are on hold will be able to move forward by using the FHA 
program. In Los Angeles alone, five multifamily projects for 1,700 
units that are stalled due to the loan limits would be able to move 
forward. The National Home Builders Association has predicted that with 
the passage of this bill, 12,000 new construction jobs will be created.
  Over the past 74 years, the FHA multifamily mortgage insurance 
program has operated successfully, working with private sector parties 
to expand the supply of housing. This public-private partnership has 
leveraged billions of dollars in private sector investment to provide 
rental housing for millions of families and the elderly throughout the 
country.
  The bill is endorsed by the Mortgage Bankers Association, the 
National Association of Home Builders, the National Association of 
Realtors, the Institute of Real Estate Management, and 10 others.
  I want to commend Chairman Frank and Ranking Member Bachus for 
sending this bill to the floor.
  I reserve the balance of my time.
  Mr. ADLER of New Jersey. Mr. Speaker, I yield such time as he may 
consume to the sponsor of the bill, the gentleman from New York (Mr. 
Weiner).
  Mr. WEINER. I thank the gentleman from New Jersey and my good friend 
from California, who has done an excellent job in explaining the bill. 
Let me just make a couple of general points that my colleagues can 
understand.
  You know, unlike a lot of the housing market, FHA loans have actually 
performed remarkably well. Some people may look to the floor today and 
say, Why would you want to do anything to expand lending when we have 
already seen some of the problems that we've had? Well, frankly, FHA 
only has a serious delinquency rate of about .3 percent, compared to 
nearly 8 percent in the rest of the marketplace.
  But to understand how FHA has worked so well, what they essentially 
do is take people who are essentially developing rental housing. They 
say, You're having trouble getting credit elsewhere, like it was when 
they were created after the Great Depression. We'll go ahead and 
provide you credit to provide rental housing that you can rent to 
middle-class residents all around the country.
  Unfortunately, what was never truly acknowledged by the program until 
now is that some parts of the country have rental housing that doesn't 
go side-to-side, but goes north and south, up and down. Congressman 
Miller has instances like that. I know I do in New York City.

[[Page H9524]]

  By definition, elevator buildings, combined with the fact that they 
are in big cities, make them more expensive. And so what we're saying 
here is, let's make sure the program keeps up with the real demand that 
we have for housing.
  Now it is imperative that we do this because, despite the best 
efforts of this Congress and the President, the banks are simply not 
doing what we wanted them to do, which is extend more credit so people 
who have good enough credit can go ahead and find apartments that they 
can rent, homes that they can buy.
  FHA is going to, under this piece of legislation--and I thank my 
colleague from New Jersey for quarterbacking it--is going to have the 
opportunity now to change their standards to reflect the way different 
things are regionally.
  I should say to all of my colleagues, if you're doing things to 
perfect farm programs, just because they don't benefit me in New York 
City doesn't mean I don't support them. This is a way to make housing 
programs reflect what truly is going on in the marketplace.
  Let me make one other point about this. It is true what my colleague 
says about Guam and Alaska and Hawaii. They're high-cost areas for 
different reasons. They're high-cost areas because getting building 
supplies to Guam, getting building supplies to Alaska and Hawaii, those 
are expensive.
  One of the things that makes housing expensive in areas like New York 
City is that you have got to install elevators in any building that's 
north of six stories. And if you wind up getting into that place, you 
wind up adding a great deal to the amount per square foot that is 
required to do the building.
  Nothing, I should say to my colleagues, does anything here to put 
taxpayers in any more jeopardy. The FHA program is entirely self-
funded. It's the premiums that are collected from people who benefit 
from the program. All we're doing now is stopping what is a bottleneck 
in the program that has said we've got a lot of moribund programs--
which is a word my assistant, Mr. Beckelman, who has developed this 
legislation, coined--these moribund programs that are ready to go but 
simply can't get the financing.
  So this House will be doing what desperately needs to be done. I 
thank the chairman of the Financial Services Committee for 
quarterbacking it and for getting it--tailbacking it; you 
quarterbacked, he tailbacked it--and for Mr. Miller of California, who 
has helped see the importance of this, and want to thank him for the 
great work he has done.
  Mr. GARY G. MILLER of California. I thank Mr. Weiner for bringing 
this bill forward. It's very reminiscent of what happened to California 
with FHA and with conforming loan limits to high-cost areas. And I 
represent a high-cost area.
  My FHA loans from 2000 to 2005 dropped by 99 percent. Today, we've 
raised conforming loan limits in high-cost areas for FHA for 
conforming, and over 90 percent of the loans made in my area today of 
California, and most of California, are conforming in FHA loans.
  This, again, addresses a loophole that has existed for years. If it's 
good enough for Alaska, Guam, Hawaii, and the Virgin Islands, which I 
think it is, it's good enough for the other high-cost areas of this 
country.
  I yield back the balance of my time.
  Mr. ADLER of New Jersey. Mr. Speaker, I have no further requests for 
time, and I yield back the balance of my time.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from New Jersey (Mr. Adler) that the House suspend the rules 
and pass the bill, H.R. 3527, as amended.
  The question was taken; and (two-thirds being in the affirmative) the 
rules were suspended and the bill, as amended, was passed.
  A motion to reconsider was laid on the table.

                          ____________________