The coming FHA reforms will help stabilize FHA's financial viability. FHA will be allowed to raise premiums. The cap on the maximum annual FHA insurance premium increases from 0.5% to 1.5% and for loans with high loan To Value ratios, 0.55% to 1.55%. But the real importance is how the reforms will shift liquidity to rental property.

Multi Family
The bill also increases FHA's multifamily loan limits for elevator buildings and buildings in high cost areas, helping lenders finance the construction and rehab of rental housing.

Sales volume is up, debt and equity financing are more available and indexes for both sales volume and equity financing registered all-time highs. Apartment market conditions continue to improve across the spectrum said NMHC Chief Economist Mark Obrinsky.

The Politics Of Housing Shifts
Multi Family is a winner

Liquidity provided by Fannie and Freddie has enabled the apartment industry to build and maintain millions of units, including an overwhelming number of market-rate apartment properties needing no federal subsidies. With the Govt needing to repair its balance sheet, this is the better asset to back.

Rental Markets
Mark Zandi, chief economist at Moody's Analytics adds not everyone can or should have a single-family home. After the single family home market collapsed, many began looking at a major distortion in the markets...government support in the housing market is disproportionately larger for homeownership than rental units.

The Congressional Budget Office reported, the government in 2009, devoted nearly four times as much to support homeownership.$230 billion for homes and about $60 billion for multi family property.

Money always finds a home and opportunity follows. Given limited Government dollars, it stands to reason, going forward that liquidity and sales will shift to the rental property arena at the expense of single family homes.

REsourced from www.yourpropertypath.com
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