Testimony By: NMHC Secretary Bob DeWitt, Vice Chairman, CEO and President of GID Investment Advisers LLC
Before: House Financial Services Committee
|Date: March 23, 2010|
On March 23, 2010, NMHC/NAA testified before the U.S. House of Representatives' Financial Services Committee on the issue of housing finance reform.
Our testimony explains how the apartment industry relies on the liquidity provided by Fannie Mae and Freddie Mac to develop and maintain affordable and workforce housing. It points out that without a fully functioning secondary mortgage market, the apartment industry cannot meet the nation's current or future housing needs—or refinance the $100-$200 billion in mortgage debt coming due over the next two years.
It identifies six key principles that NMHC/NAA believe should guide reform efforts. They include:
- The public mission of the federally supported secondary market needs to be clearly defined and should be focused primarily on using a government guarantee to provide a steady source of liquidity to the multifamily mortgage market.
- Any new or revised secondary market system must explicitly recognize the capital needs of the apartment sector.
- Lawmakers should not create a new federal secondary market entity or entities, but should instead use government support to leverage private capital.
- Any new system should provide access to explicit federal guarantees for multifamily mortgage securities and loans, and apartment companies should pay a fee to support this backstop.
- Since multifamily loans are larger and not as easily commoditized as single-family loans, any new system should allow for some portion of multifamily loans to be held in portfolio instead of being securitized.
- During transition years, it is critical to retain the resources and capacity of the existing Government-Sponsored Enterprises.
A copy of our written testimony is available here.