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Home Builders Support House Bill that Streamlines HUD Programs

WASHINGTON, D.C. – October 22, 2015 – (RealEstateRama) — The National Association of Home Builders (NAHB) today urged Congress to pass legislation that would help streamline programs to help low-income home buyers and renters.

“The Housing Opportunity Through Modernization Act of 2015 (H.R. 3700) includes many NAHB-supported bipartisan fixes to HUD programs, specifically regarding Section 8, FHA and rural housing,” NAHB Immediate Past Chairman Kevin Kelly testified at a hearing before the House Financial Services Committee’s Housing and Insurance Subcommittee.

Introduced by Subcommittee Chairman Blaine Luetkemeyer (R-Mo.), the legislation includes a number of reforms to increase access to affordable rental housing, provide assistance to low-income renters and facilitate homeownership. Specifically, the bill would:

Allow the contract terms of HUD’s Section 8 Housing Choice Voucher program to be extended from 15 to 20 years.
Pare down duplicative requirements that have made the Section 8 program difficult to administer.
Protect Section 8 Housing Choice Voucher residents from displacement due to fluctuations in the Fair Market Rent, which determines payment standard amounts for the voucher program.
Change the Rural Housing Service Single Family Guaranteed Loan Program so that it will be current with other government loan programs while providing efficiencies for home buyers and lenders.
Create a Multifamily Housing Revitalization Program to provide affordable rural multifamily housing.
Reduce current FHA regulations surrounding existing condominium projects, including streamlining project certification rules and reducing owner-occupancy requirements.
“Rep. Luetkemeyer’s bill makes necessary and common-sense changes to important housing programs,” said Kelly. “It will reduce costs to taxpayers and improve access to affordable housing to those most in need. We urge the House to act swiftly to advance this bill.”

Executive Order on Floodplain Rules Could Harm Housing Affordability

While this legislation would help housing affordability, Kelly expressed concerns that President Obama’s recent executive order on Federal Flood Risk Management Standards could result in unintended consequences for housing. The executive order expands floodplains management requirements far beyond the long-established 100-year floodplains limits for all federally funded construction projects.

HUD has indicated it will apply the new flood risk management standard to multifamily projects using FHA-backed loans for new construction and substantial rehabilitation as well as Community Development Block Grants and HOME grants.

However, HUD has not mapped the geographic limits of the floodplain nor analyzed the costs and benefits of implementing the new standard.

To avoid undermining the many positive outcomes H.R. 3700 will have on housing affordability, NAHB is urging HUD to develop and release for public comment a cost-benefit analysis associated with the new standard and identify the additional floodplain area for which future HUD actions must comply before it begins to implement the executive order.

“We strongly urge HUD to use any and all flexibility when implementing the order to ensure HUD’s rules do not make construction or substantial rehabilitation of HUD-financed or HUD-assisted multifamily housing cost prohibitive,” said Kelly.

Stephanie Pagan