SB 1527, known as the Housing Affordability Act, seeks to increase the availability of affordable housing by offering additional funding to developers. This would enable developers to secure larger loans, potentially simplifying the construction of affordable housing and lowering building costs. Its co-authors, Senators Ruben Gallego (D-Ariz.) and Dave McCormick (R-Penn.), outlined this initiative in a news release. The bill was introduced on April 30, and if passed, it would increase the Federal Housing Administration’s limits on multifamily mortgage principals for the first time in 22 years.
The loan limits for multifamily properties set by the FHA have not been increased since 2003. This stagnation has led to a decline in the dollar volume of multifamily firm commitments issued by HUD. Consequently, nearly all communities are now classified as “high-cost areas” due to the rising costs of construction, as noted by Gallego and McCormick.
The proposed limits, calculated by unit, are up to four times higher than the previous limits. If passed, the bill would increase the per-unit mortgage loan limits for rental housing in buildings without elevators. Specifically, the new limits would be $167,310 for a studio apartment (up from $38,025), $185,328 for a one-bedroom unit (up from $42,120), and $221,364 for a two-bedroom unit (up from $50,310), among other changes.
The proposed legislation aims to update the inflation adjustment index by replacing the Consumer Price Index with the Price Deflator Index for Multifamily Residential Units Under Construction, as published by the U.S. Census Bureau. According to congressional records, the bill has been referred to the Senate Committee on Banking, Housing, and Urban Affairs.
More than a dozen housing associations, including the National Multifamily Housing Council, the National Apartment Association, and the Mortgage Bankers Association, support the bill.
