NAHB Criticizes Proposed Insurance Increase

Washington, DC, June 8, 2012 --  The National Association of Home Builders told Congress that the Obama Administration's 2013 budget proposal to increase multi-family mortgage insurance premiums would be counterproductive.

Testifying before the House Financial Services Subcommittee on Insurance, Housing and Community Opportunity, Bob Nielsen, the immediate past chairman of NAHB and a multifamily home builder from Reno, Nev., said that the need to raise the premiums in order to reduce defaults has not been demonstrated and that the U.S. Department of Housing and Urban Development has failed to provide an analysis on how the proposed higher MIPs would affect borrowers, lenders or renters who live in properties insured under the programs.

“The proposed increases will not provide a buffer against future FHA losses because there is no segregated fund, and excess income is simply returned to the U.S. Treasury each year,” said Nielsen.

“Increases will only add to property owners' costs, thereby affecting rents and discouraging the production of rental housing.”