In an effort to stimulate the production of affordable housing, the Federal Housing Administration (FHA) announced last week that it will cut multifamily mortgage insurance rates starting April 1, according to Affordable Housing Finance's Christine Serlin.
The FHA estimates that the multifamily insurance rate reductions will spur the rehab of an additional 12,000 units of affordable housing annually, create new units, and improve energy efficiency to help reduce utility costs for residents.
This comes at a time when the nation continues to lose more than 300,000 affordable housing units a year from the aging stock and faces an affordability crisis with more than a quarter of renters spending over half their incomes on rent.
“More Americans will have a safe place to call home,” said Julian Castro, secretary of the Department of Housing and Urban Development (HUD), at the announcement during a visit to an affordable housing community in Columbus, Ohio. “We want to use every tool at our disposal to spark the creation of more affordable housing in communities big and small.”