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MBA, NAHB: Tax on Renters is Wrong Remedy

WASHINGTON, DC-The Mortgage Bankers Association and the National Association of Home Builders have come out together to jointly oppose an increase in the FHA multifamily insurance premium, which they call a tax on renters.

By Amy Vaughn | Updated on June 05, 2001

WASHINGTON, DC-The US Department of Housing and Urban Development yesterday (June 4) announced it will institute an immediate increase in the FHA multifamily insurance premium. The multifamily insurance program was shut down April 19 when HUD ran out of its loan loss reserve, or credit subsidy. The increased premium is supposed to help raise revenue with which to restart the program. Immediately following the announcement, the Mortgage Bankers Association and the National Association of Home Builders joined together in opposition to the increase.

The MBA and NAHB jointly contend that the increase is tantamount to a tax on renters. “The proposed premium increase is a tax on renters and would cause multifamily rents to increase by 4%,” said Michael Petrie, president of P/R Mortgage and chairman of MBA’s Commercial Real Estate Finance/Multifamily Board of Governors.

“At a time when the national economy is struggling, this increase would hurt those families that can least afford it,” Petrie continues. “The FHA multifamily credit subsidy crisis urgently needs to be addressed, but not on the backs of renters. We are also very concerned that HUD chose to circumvent the normal rulemaking process.”

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