WASHINGTON — Amid skyrocketing housing prices, President Joe Biden’s administration is taking new steps to spur more affordable housing as the White House seeks to close the U.S. “housing supply gap” in five years.
Among the efforts is increasing federal assistance to help finance and produce more factory-built manufactured homes,including mobile homes.
Freddie Mac recently announced it is exploring purchasing chattel loans, on which the majority of homeowners who buy manufactured homes rely rather than traditional mortgages.
The Federal Finance Housing Agency has also committed to work with lenders to begin a pilot program to offer financing for the construction and renovation of accessory dwelling limits, which are typically cheaper than traditional homes. This includes garage apartments, backyard homes and in-law suites.
These and other measures are outlined in a new housing supply action plan the Biden administration will unveil Monday, according to senior administration officials who discussed the report to reporters on the condition of anonymity.
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Biden faces increasing pressure to find solutions to 40-year high inflation, which the president last week called his “top domestic priority.” The U.S. has a shortfall of 1.5 million homes in the housing supply, according to Moody’s Analytics, helping fuel a spike in housing rental and sale prices.
Biden’s $1.75 trillion Build Back Better social-spending plan proposed $150 billion for the construction and rehabilitation of more than 1 million affordably priced rental units and single-family homes. But the plan stalled in Congress in December, leaving the White House to address affordable housing administratively in a more limited scope.
Incentives for housing density
The Biden administration is ramping up financial incentives for local jurisdictions that allow greater housing density in zoning and land use policy, officials said. The Department of Transportation prioritized density and rural main street revitalization this year in three grant packages totaling $6 billion. The department will continue such criteria in future grants.
To jump-start more construction, Fannie Mae is exploring expanding its loan offerings to developers to finance the construction of multifamily housing in a single closing loan that also serves as a permanent mortgage.
Biden’s action plan also takes aim at the practice of large-scale investors buying single-family homes in low-income neighborhoods. The FHA will make foreclosed real estate-owned properties available to owner-occupants and nonprofits for 30 days before opening it up to all bidders. HUD has taken similar steps for vacant property it holds.
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Home prices increased nearly 20% in major cities across the country in February, according to the latest S&P CoreLogic Case-Shiller national home price index. National Association of Home Builders research found the cost of building materials has increased 33% since the start of the pandemic.
The White House is encouraging states and cities to use unspent dollars it received in direct aid from the American Rescue Plan, which passed in spring 2021, on preserving or adding affordable housing. Local and state governments have already committed $3.2 billion in COVID-19 rescue funds to housing.
Biden’s plan also launches an effort across the federal government and private sector to finish construction on the most new homes in the U.S. since 2006. Officials said the administration will work with builders to address supply chain issues that have slowed construction.
Contributing: Terry Collins
Reach Joey Garrison on Twitter @joeygarrison.