HUD Finance Reform

Studies done by University of Utah professor Arthur C. Nelson, such as "The Next One Hundred Million," have estimated that the current supply of unattached single-family housing already exceeds projected demand and will continue to do so until 2037. Further analysis by Nelson (see “Reshaping America’s Built Environment”) indicates that as the glut of large-lot homes continues to flood the market, the now clearly evident new demand for smaller housing in walkable, traditional neighborhood settings will increase substantially and consistently.

Since 2010, CNU and its allies have been advocating for FHA, Fannie Mae and Freddie Mac to revise the regulations on the amount of commercial space allowed in mixed commercial-residential areas. On September 13th, 2012, in HUD Mortgagee Letter: 2012-18, and extended on August 29, 2014 in HUD Mortgagee Letter 2014-17, FHA revised rules that limited the cap of commercial space in mixed-use condo buildings from 25% to an updated 35% commercial use, with possible waivers for developments with up to 50% commercial space (see page 176 in HUD Multifamily Accelerated Processing Guide 2016 below).

The recent FHA change not only represents a victory for CNU and its allies, but for the places that are increasingly where people want to live: connected, compact communities that deliver public health, environmental and economic benefits. As Christopher Leinberger has written, "Housing is such a large part of the economy that a sustained, robust recovery is difficult to imagine without a corresponding recovery in the building, buying, and selling of houses."