WASHINGTON – The Mortgage Bankers Association has urged the Senate to approve legislation that will restart the Federal Housing Administration’s multifamily mortgage insurance program. According to the MBA, the program would encourage the development of more that 50,000 rental units in 33 states and the District of Columbia. The Senate Appropriations Committee recently passed a fiscal 2001 supplemental spending bill that would release $40 million in credit subsidies, or loan loss reserves, for the FHA’s multifamily mortgage insurance program. According to the MBA, when the program came to a halt in April, development on about 53,000 rental units also ceased. Although Congress in December passed an emergency supplemental spending bill to continue insuring some FHA multifamily loans, the Bush administration had refused to declare an emergency to release the funds. The Senate bill removes the emergency designation. The U.S. House of Representatives earlier approved its $40 million version of the supplemental spending bill, but ties the funds to an increase in the multifamily loan insurance premiums. The MBA strongly opposes the insurance premium increase claiming that it would raise rents by up to 4%.

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