MBA Fights Shutdown of FHA Insurance Program

WASHINGTON, DC-An array of housing, government and business officials told lawmakers Thursday that unless they release funds for the Federal Housing Administration’s mortgage insurance program, the development of more than 50,000 apartments will screech to a halt. The FHA has told lenders it plans to stop insuring multifamily loans this month because it has run out of money to back the loans.

The Mortgage Bankers Association released information Thursday showing that more than $3.4 billion in loans in 33 states and Washington, DC could be suspended. According to the MBA, even though Congress in December appropriated $40 million to continue insuring the loans, the Bush administration has said it won’t release the funds.

“We support President Bush and [Housing and Urban Development] Secretary Mel Martinez in their efforts to strengthen the economy. But without these funds, projects will not be built, and an opportunity to provide an immediate economic stimulus and produce tens of thousands of construction jobs will be lost,” MBA vice president John A. Courson told the House Subcommittee on Housing and Community Opportunity.