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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 2024 base statutory per-unit lending limits have increased 4.9% from 2023. The local high cost multiplier factor adjustments remained at 270% (2.7x) for all standard regions, with all such regions now eligible for the 315% (3.15x) multiplier waiver, and a few non-contiguous regions designated as a "Special Limit Area" now eligible for 405% (4.05x) multiplier adjustment factor.

The following are the published Basic Statutory Mortgage Limits for Calendar Year 2024 for Section 221(d)4 and 223(f) loan programs:

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.

This 4.9% increase in statutory lending limits from 2023, following last year's 8.3% increase from 2022, should continue to help HUD financing become more competitive and open up HUD financing as a viable option for more projects. Although historically most projects were unaffected, HUD’s statutory mortgage limits have recently become more relevant with the rise in construction costs and real estate values which otherwise support more debt under the HUD loan program. HUD’s statutory lending limits had previously not kept pace, as annual statutory limit adjustments are based only on increases in the Consumer Price Index, which had 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. With inflation slowing down and the rise in interest rates starting to cool real estate valuations, this 2024 statutory limit increase should help close the gap.

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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U.S. Department of Housing & Urban Development (HUD) announced the first increase of its Large Loan threshold for multifamily properties to $120 million, up from $75 million since the policy was first rolled out in 2014. Large Loans are subject to stricter underwriting parameters, which you can read more about in our HUD 221(d)(4) and 223(f) loan program overviews.

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 for Large Loans are reduced to 75%-87% LTV / LTC (70% LTV for cash-out). HUD's policy to limit loan proceeds and impose additional risk mitigation requirements for Large Loans reduces the risk to the FHA insurance fund, while making such loans less attractive to borrowers, by design. This Large Loan policy update reflects HUD's increased appetite for loans in the $75 million to $120 million range. "HUD’s risk analysis and industry feedback showed this revision was prudent to revise upward, primarily due to cost increases of housing and construction over the last decade, without providing undue risk to the FHA insurance fund," notes HUD in its formal published Mortgagee Letter 2023-14: Revisions to Large Loan Risk Mitigation MAP Guide Policies.

Additional details are provided by HUD in its formal published notice linked to above. Contact Us for more information and to learn more about HUD loan programs. 

Interested in learning more about FHA's attractive loan programs?
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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 8.3% from 2022. The local high cost multiplier factor adjustments remained at 270% (2.7x) for all regions, with fewer regions becoming eligible for the 315% (3.15x) multiplier waiver.

The following are the published Basic Statutory Mortgage Limits for Calendar Year 2023 for Section 221(d)4 and 223(f) loan programs:

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.

This 8.3% increase in statutory lending limits from 2022 should help HUD financing become more competitive and open up HUD financing as a viable option for more projects. Although historically most projects were unaffected, HUD’s statutory mortgage limits have recently become more relevant 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 had previously not kept pace, as annual statutory limit adjustments are based only on increases in the Consumer Price Index, which had 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. But with inflation slowing down and the rise in interest rates starting to cool real estate valuations, this 2023 statutory limit increase should help close the gap.

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. 

Interested in learning more about FHA's attractive loan programs?
Click to learn more!

U.S. Department of Housing & Urban Development (HUD) announced plans to implement reductions in the upfront and annual mortgage insurance premiums (MIP) it charges under the Section 232 mortgage insurance program for qualifying residential care facilities that meet industry-recognized green building certifications. Upon implementation, MIP rates will be reduced to 0.25% for mortgages on properties that meet the new Section 232 Green MIP requirements. The current standard MIP rates are generally 1.00% upfront for year-1 and between 0.45% - 0.77% annually thereafter (see 232 MIP Rates and 232/223(f) MIP Rates).

The planned Section 232 Green MIP reduction follows the successful implementation of a similar Green MIP reduction under the HUD multifamily loan program. Under the multifamily program, to qualify for the Green MIP reduction, new construction multifamily projects most undergo a Statement of Energy Design Intent (SEDI), as part of application processing, which demonstrates that the building design meets an industry-recognized standard for green buildings, such as ENERGY STAR, National Green Building Standard, U.S. Green Building Council's LEED-H, and others. Once completed and stabilized, such properties must have their actual energy utility usage analyzed annually in a Statement of Energy Performance (SEP) that results in a passing score based on the selected green building standard. Existing projects that do not require additional repairs to qualify for the green building standard only need to undergo an SEP as part of application processing, and then again each year, thereafter. Similar requirements are anticipated under the Section 232 Green MIP program.

HUD insured loan programs offer long term, low interest rate financing for new construction and permanent financing for qualifying residential care facilities and apartment projects. The popular Section 232 and 232/223(f) residential care facility loan programs offer loan amounts up to 80%/90% (acquisition/new construction) LTC and 75%-85% LTV, as supported by a 1.45x DSCR.

Additional details regarding the Section 232 Green MIP reduction are available in the official FHA press release and Federal Register Notice. Give us a call for more information and to learn more about HUD loan programs. 

Interested in learning more about FHA's attractive loan programs?
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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:

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. 

Interested in learning more about FHA's attractive loan programs?
Click to learn more!

U.S. Department of Housing & Urban Development (HUD) has just terminated its debt service reserve requirements on 223(f) refinance and acquisition loans for existing multifamily properties. HUD had previously implemented these requirements in April 2020 in response to the economic instability and increased risk environment caused by COVID-19.  Such requirements included a 9-month debt reserve on market rate projects and up to a 12-month debt service reserve on unsubsidized affordable projects, as more detailed in this article. These requirements were to remain in effect until HUD determined that the real estate markets were no longer adversely impacted by COVID-19. According to HUD, with its release of HUD Mortgagee Letter 2022-03, that time has now come. Additional details are available in HUD's press release.

Adroc Capital is an approved HUD MAP and LEAN Lender. Give us a call for more information or to learn more about HUD loan programs. 

Interested in learning more about FHA's attractive loan programs?
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U.S. Department of Housing & Urban Development (HUD) published updated 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 are unchanged from 2020, while local high cost multiplier factor adjustments were updated in some cities.

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 following are the published Basic Statutory Mortgage Limits for Calendar Year 2021 for Section 221(d)4 and 223(f) loan programs:

The statutory mortgage limits serve to limit HUD’s exposure to an individual project by capping loan proceeds on a per-unit basis. Although most projects remain unaffected, HUD’s statutory mortgage limits are increasingly becoming a factor as interest rates and cap rates have come down which have pushed up market values and supportable debt. HUD’s statutory lending limits have not kept pace as annual statutory limit adjustments are based only on changes in the Consumer Price Index.  Statutory lending limit waivers have also become more difficult to obtain based on updated guidance from HUD. 

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. 

Interested in learning more about FHA's attractive loan programs?
Click to learn more!

U.S. Department of Housing & Urban Development (HUD) has published updated Annual Indexing of Basic Statutory Mortgage Limits for Multifamily Housing Programs and its Annual Revisions to Base City High Cost Percentage.

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 following are the published Basic Statutory Mortgage Limits for Calendar Year 2020 for Section 221(d)4 and 223(f) loan programs:

The statutory mortgage limits serve to limit HUD’s exposure to an individual project by capping loan proceeds on a per-unit basis. Although most projects remain unaffected, HUD’s statutory mortgage limits are increasingly becoming a factor as interest rates and cap rates have come down which have pushed up market values and supportable debt. HUD’s statutory lending limits have not kept pace as annual statutory limit adjustments are based only on changes in the Consumer Price Index.  Statutory lending limit waivers have also become more difficult to obtain based on communications with HUD. 

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.

Interested in learning more about FHA's attractive loan programs?
Click to learn more!

U.S. Department of Housing & Urban Development (HUD) has just implemented debt service reserve requirements on 223(f) refinance and acquisition loans for existing multifamily properties in response to the economic instability and increased risk environment caused by COVID-19.  This requirement will remain in effect until such time HUD deems the associated risks mitigated.

Generally, under the new rules, a 9-month reserve will now be required on market rate projects and up to a 12-month reserve will be required on affordable projects. LIHTC projects with similar reserve facilities required by the tax credit investor that are available to cover the HUD loan debt service requirements may offset the HUD debt serve reserve requirement, subject to HUD approval on a case by case basis.  Projects with Section 8 project-based rental assistance covering greater than 90% of units will be exempt from the debt service requirement.  The debt service reserve will be eligible for release 6 months post-closing after the project achieves 3 consecutive months of underwritten debt service coverage.

Additional details are provided in the formal HUD publication: HUD Mortgagee Letter 2020-11.  Give us a call for more information or to learn more about HUD loan programs. 

Interested in learning more about FHA's attractive 223(f) refinance loan program?
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U.S. Department of Housing & Urban Development (HUD) announced this week that it has revised its long-held policy requiring a three-year wait period following construction completion before accepting HUD-insured refinance applications for multifamily properties.  Under the new rules recently constructed multifamily properties are now eligible for a HUD 223(f) refinance upon achieving stabilization. 

Eligible properties must achieve the underwritten income and expense levels and debt service coverage ratio for a period of at least three consecutive months prior to closing.  Cash-out refinances have the additional limitation requiring a 50% hold-back until the project achieves six months consecutive performance at these levels.   The full details are published in Mortgagee Letter 2020-03. 

The HUD 221(d)4 loan has traditionally been one of best new construction/sub-rehab loans available in the market, with its long-term, low interest rate financing covering up to 90% of development cost.  However, its Achilles heel has been its Davis Bacon wage requirements along with longer processing time which have discouraged some developers. With the elimination of the 3-year rule for multifamily properties, conventionally financed developments can still benefit from HUD's attractive long-term, low interest rate financing.

Give us a call for more information or to learn how HUD loan programs can benefit your real estate investment.