Summary: The Department of Housing and Urban Development (HUD) is proposing to restructure its multifamily housing portfolio via an approach known as "mark to market." About two million privately owned and managed rental units benefit from mortgage insurance or rental subsidies provided by HUD. The proposal seeks to overcome problems plaguing projects in HUD's multifamily portfolio that both have HUD-insured mortgages and receive rental subsidies tied to units in the projects under HUD's Section 8 rental assistance program. The proposal calls for decoupling rental subsidies and mortgage insurance at individual projects and adjusting mortgage debt to help projects compete effectively in the commercial rental market. This testimony focuses on the following questions: (1) What problems affect the condition of HUD's multifamily housing portfolio? (2) How does HUD believe that its mark-to-market proposal would solve these problems? (3) Which properties will be affected by HUD's proposal? (4) What costs and savings may result from the mark-to-market approach? (5) What key issues does Congress face in considering the proposal?
