San Diego - The Bush Administration probably could not have nominated anyone less popular with multifamily developers and lenders to be assistant secretary for housing and FHA commissioner than John Weicher. The senior fellow at the Hudson Institute has advocated the abolition of FHA loan insurance for multifamily housing.
Reaction to the nomination was very negative among the developers and lenders at the NAHB multifamily housing conference here in March. While none of the attendees wanted to be quoted by name for fear of retribution from HUD, they were all pessimistic about the chances for continued improvement in FHA multifamily operations under Weicher.
"Putting Weicher in charge of multifamily mortgage insurance is like putting David Duke in charge of the Civil Rights Division (at the Department of Justice)," said one speaker in a seminar at the conference. The speaker said he was quoting an article in "The Daily Bond Buyer" and did not want his name to be used. "Weicher is very knowledgeable about HUD programs. He just doesn't like anything they do," the speaker added.
Weicher would not return calls for comment on his record. However, in a 1995 article in Volume 6, Issue 2 of the Housing Policy Debate (a publication of Fannie Mae), Weicher portrayed FHA multifamily programs as a source of most of the agency's problems and suggested they be terminated. He wrote that this would "enable FHA to concentrate on what it does well and serve its basic public purpose effectively, without the distractions of the complicated multifamily programs that take much more than their share of FHA's resources." The article discusses the costs of FHA multifamily insurance but does not mention any potential benefits of the programs or the public policy goals it serves.
Since Weicher is well known for his opposition to multifamily insurance, the appointment appears to signal that the Bush Administration will abandon efforts to increase use of FHA multifamily insurance through faster processing and other changes.
However, the 2002 HUD budget includes a request for an increase in FHA multifamily loan limits - something that will encourage far greater use of the programs. The loan limit increase request represents a quick and important victory for the Mortgage Bankers Association of America (MBAA).
Sources said HUD Secretary Mel Martinez also appears to be receptive to the MBAA's call for a new below-market FHA loan program for apartments aimed at moderate-income households. However, they added, the increase in loan limits is seen as a prudent and winnable first step before proposing a new program.
It's very likely that Weicher would oppose such a program, but it's unclear how much power he'll have over the administration's final decision on the matter.
