The Department of Housing and Urban Development (HUD) proposed a leveling of multifamily mortgage insurance premiums (MIPs) to 25 basis points for all Federal Housing Administration (FHA) multifamily program categories. The move, announced Tuesday, would also render an FHA green housing mandate “economically obsolete,” according to a HUD press release.
The HUD announcement follows a recent request by the Mortgage Bankers Association (MBA) for the federal department to consider updating the FHA’s Multifamily Accelerated Processing (MAP) program, with the aim of lowering housing costs and boosting housing supply. MAP is a system that establishes national standards for approved lenders to prepare, process and submit loan applications for FHA and HUD multifamily construction financing.
MBA President and CEO Bob Broeksmit had noted in an April 22 letter to HUD Secretary Scott Turner that a number of environmental requirements had been added to the MAP program since 2011.
“Many of these are not in any statute or regulation, add significant expense and time to multifamily projects, and limit new development,” Broeksmit wrote. “We strongly encourage HUD to review the necessity of these requirements, given the high demand for housing.”
HUD responded Tuesday with the proposal for an across-the-board leveling of MIPs to 25 basis points, which would have the effect of ending the costlier “Green and Energy Efficient” loan category.
“This action is the first step in eliminating the ideologically motivated green energy category, which will lower costs for lenders and developers and will help accelerate the supply of affordable housing stock for the American people,” HUD stated in its announcement.
MBA promptly issued a press release, applauding HUD’s response to its request.
“MBA has long advocated for sensible changes that can make HUD’s multifamily lending programs more effective, with a goal of lowering rental housing costs by boosting supply,” Broeksmit stated in response to the HUD move. “We commend HUD Secretary Scott Turner and his team for being responsive to our recommendations on this issue. Leveling upfront and annual mortgage insurance premiums will help increase rental housing production and improve affordability for renters across the country.”
