“Up to 10 million apartment units short of what is necessary”, warns MBA’s Mike Flood
An MBA-led coalition has called on the US Government’s Department of Housing and Urban Development (HUD) to address the severe shortage of affordable housing, amid lengthy delays in applications and year-long closing times.
In a letter addressed to HUD Secretary Marcia Fudge, the 12 signatories from various national associations, including groups representing lenders and builders, urged Fudge to tackle “the severe processing delays that are impeding the financing of sorely needed affordable housing” in the FHA multifamily and healthcare programs.
The letter dated July 22 highlighted significant six-month backlogs, resulting in application to closing times for a refinance of longer than a year.
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In the country’s Northeast, there are instances of people having to wait for underwriters until June 2022, when the average time is between one and two months. Meanwhile in the Midwest, the list for loans is empty.
The letter went on to warn that delays were slowing the HUD’s ability to both increase supply and reduce the cost of multifamily housing and residential healthcare facilities.
MBA’s AVP of Commercial and Multifamily, Sharon Walker, who works closely with the FHA, stressed that it was “a subsidized housing issue” as it impacted on the lives of seniors and seniors in assisted living facilities.
The two major contributing causes were listed as the high demand for the FHA’s lending programs and the recovery of the economy, which had taxed HUD staffing resources.
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The letter stated: “Last year, HUD and its MAP lenders funded the production of the largest supply of multifamily, seniors, and healthcare housing in the program’s history.”
It said it was “on record to surpass that total this year”, jumping from last year’s record $21.8 billion to a projected $34 billion by the end of this year.
Mike Flood, the Senior Vice President, Commercial/Multifamily Policy and Member Engagement at the MBA, told MPA that the crisis which was affecting thousands of families essentially stemmed from a severe housing shortage.
He said: “I think we’re between a million and 10 million apartment buildings/units short of what is necessary to help with affordable housing.
“(Building) costs are increasing. And one of the things that MBA has been focused on is, how do we make proper zoning laws that allow us to build some more high density, affordable housing in cities?”
Flood, who is also responsible for leading public policy for affordable housing lenders, said he understood the challenges faced both by the HUD and Secretary Fudge.
“I give her a lot of credit, because we have to remember that the HUD is not a corporation. When it gets access to business, it can’t just put out a ‘we’re hiring sign’ - they have to get money from the Government.”
Among the proposed solutions, the group suggested utilizing additional contractor resources to supplement workloads of HUD underwriter staff; redistributing workloads across regions to meet demand; and, over the long term, getting the HUD to find a balance of permanent and contracted resources to ensure adequate staffing.
