U.S. Department of Housing & Urban Development (HUD) published its Annual Indexing of Basic Statutory Mortgage Limits for Multifamily Housing Programs and its Annual Revisions to Base City High Cost Percentage. The base statutory per-unit lending limits have increased 4.2% from 2021, while local high cost multiplier factor adjustments were increased to 270% (2.7x) for all regions, with additional regions becoming eligible for the 315% (3.15x) multiplier waiver.
The following are the published Basic Statutory Mortgage Limits for Calendar Year 2022 for Section 221(d)4 and 223(f) loan programs:
| Bedrooms | Non-elevator | Elevator |
| 0 | $56,992 | $61,488 |
| 1 | 64,617 | 70,490 |
| 2 | 78,107 | 85,717 |
| 3 | 98,036 | 110,887 |
| 4+ | 110,779 | 121,723 |
| Bedrooms | Non-elevator | Elevator |
| 0 | $57,197 | $66,715 |
| 1 | 63,360 | 73,923 |
| 2 | 75,683 | 90,643 |
| 3 | 93,285 | 113,526 |
| 4+ | 105,608 | 128,367 |
HUD insured loan programs offer long term, low interest rate financing for new construction and permanent financing for qualifying affordable housing and market rate apartment projects. The popular Section 221(d)4 and 223(f) multifamily loan programs offer loan amounts up to 85%-90% LTV / LTC (80% for cash-out refinances) supported by a 1.176x – 1.11x DSCR. However, loan proceeds available under these programs are subject to HUD’s statutory per unit lending limit caps. The statutory mortgage limits serve to limit HUD’s exposure to an individual project by capping loan proceeds on a per-unit basis.
Although historically most projects were unaffected, HUD’s statutory mortgage limits are increasingly become a factor with the rise in construction cost and real estate values which otherwise support more debt under the HUD loan program. HUD’s statutory lending limits have not kept pace. Annual statutory limit adjustments are based only on increases in the Consumer Price Index, which has been below the real estate valuation and construction cost increases experienced in the market. Statutory lending limit waivers have also become more difficult to obtain based on updated guidance from HUD. For example, HUD statutory limit waivers are not considered for cash-out refinance transactions.
Additional details are provided in the formal published notices linked to above. Contact Us for more information and to learn more about HUD loan programs.
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