In a dramatic move to spur construction of much-needed multifamily rental housing across the country, Secretary Martinez said that HUD has proposed to raise FHA multifamily loan limits by 25 percent. The loan limits were last increased in 1992.

"Skyrocketing construction costs have resulted in a virtual halt in the building of multifamily homes across America," Martinez said in remarks to the National Council of State Housing Agencies on Tuesday. "Our proposal, combined with the President's homeownership initiatives, will provide thousands of Americans new opportunities for a place to call home."

By law, HUD today only can provide FHA insurance of about $40,248 for a two-bedroom apartment. That figure may vary by region, and in certain high cost areas may be multiplied by up to 240 percent. Since the last increase in 1992, construction costs in some areas have risen by 25 percent or more. Coupled with static FHA loan limits, developers have been driven to more lucrative projects.

A 25 percent increase combined with the existing ability to multiply loan limits will mean that FHA multifamily insurance will be available to help increase production in virtually every region of the country.

Read the full announcement