Menendez calls for modernization of FHA’s financing of multifamily housing lending
The Senator also emphasized the importance of keeping flood insurance affordable to lower housing costs for working families
WASHINGTON, D.C. – U.S. Senator Bob Menendez (D-N.J.), a senior member of the Senate Committee on Banking, Housing and Urban Affairs, questioned witnesses about the Federal Housing Administration’s (FHA) ability to finance multifamily construction because of loan limits set in statute without an update in 20 years.
The Senator introduced a discussion draft that would increase FHA’s multifamily lending authority throughout the country for the first time in 20 years, and enable the agency to better support apartment construction and ultimately bring down rental costs.
“The National Low Income Housing Coalition’s 2022 ‘Out of Reach’ Report showed just how hard it is for low-income renters to afford even modest housing. In my home state of New Jersey (…) a median-income renter is barely able to pay for a one-bedroom home,” Menendez said. “The fact is there just aren’t enough rental homes being built. And part of that is because federal lending programs through HUD and the Federal Housing Administration haven’t kept pace with the market.”
Sen. Menendez also questioned witnesses about how underinsured and uninsured low-income families living in homes with increased flood risks would fare during disaster recovery. The Senator will soon be reintroducing the bipartisan National Flood Insurance Program Reauthorization and Reform (NFIP-RE) Act, which was first introduced in 2021, that reforms the National Flood Insurance Program (NFIP), ensures affordability and sustainability, and invests in mitigation and prevention to spare the high cost of rebuilding after flood disasters.
“In Paterson, New Jersey, where the median household income is $50,000 a year, 180 homeowners will see their premiums increase from an average of $1,500 a year to an average of $4,000 a year,” Menendez said. “The cost of flood insurance is tied directly to the affordability of homeownership, especially if your mortgage provider requires coverage, which most do if you’re in a flood plain. So, I worry many families face an impossible choice of being overburdened with housing costs or forgoing insurance for their most important financial asset which is their home.”
Sen. Menendez also spoke about how helping ensure teachers, firefighters, and police officers can afford homes in the communities they serve would make those communities safer and more prosperous. Last Congress, the Senator cosponsored the Homes for Every Local Protector, Educator, and Responder (HELPER) Act that establishes a new affordable home loan program, administered under the FHA, to assist first responders and educators in purchasing a home.
Sen. Menendez has long been a leader in the fight to build more affordable housing. In February, the Senator called for affordable housing and flood insurance protections during a Banking Committee hearing. In August 2021, he introduced the Livable Communities Act which encourages local communities to partner strategically to develop bold, innovative solutions that reflect their unique character, while leveraging existing assets,including access to transit to help revitalize neighborhoods, spur economic development, create jobs, and address their affordable housing needs.
