Mortgage Credit Enhancements

Options for FHA in Meeting the Need for Affordable Multifamily Housing Gao ID: T-RCED-92-52 April 3, 1992

Mortgage credit enhancements--financing arrangements to ensure loan repayments by builders of multifamily rental properties--are among a broad range of mechanisms that the Federal Housing Administration (FHA) can use to expand the supply of affordable housing for lower-income tenants. If such enhancements are employed, they must be cost effective in achieving the desired result. Yet ensuring cost effectiveness depends on having accurate data on the costs and risks involved, and information on the performance characteristics of affordable multifamily housing loans is currently nonexistent. GAO suggests that Fannie Mae, Freddie Mac, and FHA--because they now hold large portfolios of multifamily mortgages or insure such mortgages and are also experienced in maintaining relevant large databases--would be good candidates for developing such information. Further, the bank regulatory agencies, the Federal Housing Finance Board, the Bureau of Economic Analysis, and various professional organizations representing mortgage originators could lend valuable insight in developing a national affordable housing database.



The Justia Government Accountability Office site republishes public reports retrieved from the U.S. GAO These reports should not be considered official, and do not necessarily reflect the views of Justia.