Given the stack of feedback we received following last
month’s coverage of the FHA’s proposed
increase of mortgage insurance premiums, Multifamily
Executive decided to reach out to the FHA’s
deputy assistant secretary of multifamily housing, Marie
Head, to have her provide an update on what the industry
can expect to see from the agency this year. The full
version of the interview can be found in next
month’s issue of Apartment Finance Today,
but here’s a preview:
MFE: What sort of multifamily volume do
you expect to get done this year compared to the number
from last year?
Head: Right now we are tracking to meet
the same volume that we did last year. A lot of that is due
to the fact that some of the loans that were leftover from
last year we are getting through the process now. So, I
think we are going to be on track to do the same amount of
business we did last year.
MFE: What are you expecting in terms of
tax credit business? Are you expecting more than last
Head: Yes. In fact, we have seen some
increases in our volume in the tax credit program, which is
another very good reason for the tax credit pilot program.
But from 2011 compared to 2009, we saw a 149 percent
increase in the number of firm commitments that were issued
both for new construction, for purchases and rehabilitation
of some older tax credit properties.
MFE: I was hoping you could talk a
little bit about the Mortgage Insurance Premiums and where
we are in the process of raising them right now.
Head: We published our proposal to
increase the MIP a couple of months ago. And let me just
say that we are being very proactive, ensuring that we are
managing the risk profile that we are now dealing
with and that also we are not underpricing our product in
the marketplace. This is truly a balancing act and
that’s our No. 1 priority for making sure that we
are managing the risk with the new types of loans that we
are doing. We see a lot of new, large loans that
historically FHA has not processed. We are being proactive
in assessing that risk for historically a marketplace we
have not been in.
MFE: How would you respond to concerns
about the MIP increase from industry trade groups?
Head: I would say to them that FHA,
again, is in a market where we have not played before and
we need to proactively manage the risk that’s
associated with that. And [we are] forward thinking in that
arena rather than relying on historical data in a budgeting
model that did not have the new parameter of what
we’re dealing with in it.