Fearful Future Significantly increasing operating costs are putting in financial jeopardy hundreds of affordable apartment communities across the country that were built using Low Income Housing Tax Credits (LIHTC), according to a new study by the NAHB. Adding to the threat is a recent change in the data used by HUD to calculate income limits. This change in data methods has artificially frozen both the maximum income limit requirements of eligible residents and the rents that can be charged in a large number of areas across the country. In these areas, it's impossible to offset rising costs through increases in rents that would normally occur as the result of ordinary inflation. The NAHB found nearly 200 counties across the country where flat income limits had completely frozen rents at tax credit properties since 2001. Over that time period, utility costs across the country have risen by an average of almost 27 percent.

Call for Change Builders continue to demand homeownership for all Americans, pushing for viable alternatives to the sub-prime market by urging reform for the Federal Housing Administration's (FHA) single-family mortgage insurance programs. “Comprehensive FHA reform would mean greater flexibility in responding to the needs of borrowers, enabling more working families to become homeowners, and providing a viable alternative to the volatile subprime market,” says NAHB Executive Vice President Jerry Howard. The FHA could potentially assist tens of thousands more borrowers who need an exit strategy from their subprime mortgage by insuring fixed-rate, adjustable-rate, and hybrid adjustable-rate mortgage loans to borrowers with limited cash reserves or slightly tarnished credit.

Making Strides On May 22, home builders applauded House passage of legislation that they hope will establish a strong regulatory framework for housing government-sponsored enterprises (GSEs)—Fannie Mae, Freddie Mac, and the Federal Home Loan Banks. Because of the importance of this issue to the housing community, the NAHB designated passage of H.R. 1427, the Federal Housing Finance Reform Act. “The comprehensive GSE reform bill offers a sound regulatory solution for our secondary market institutions that would safeguard and strengthen their financial health while simultaneously supporting their ability to fulfill their housing-mission activities,” says Jerry Howard, executive vice president and CEO of the NAHB. In another key vote for the NAHB, lawmakers—by a margin of 383 to 36—overwhelmingly approved a pro-housing amendment to clarify that a new regulator must base its evaluation on the risk of Fannie Mae's and Freddie Mac's portfolio holdings solely on mission and safety and soundness considerations, and not on broader concerns, such as systematic risk.