The U.S. Department of Housing and Urban Development (HUD) announced a proposal to standardize all Upfront Capitalized and Annual Mortgage Insurance Premiums (MIPs) to 25 basis points across all Federal Housing Administration (FHA) multifamily programs. This change would eliminate the separate Green and Energy Efficient MIP category and aims to simplify the premium structure, reduce costs for lenders and developers, and support increased production of affordable housing.
Under the proposed change, all multifamily loans would be subject to the same MIP rate, regardless of energy efficiency or green building certification. As a result, loans that previously qualified for the Green MIP rate would no longer be required to demonstrate green building compliance or submit annual energy performance reports.
According to HUD, this initiative is intended to streamline the financing process and enhance predictability for housing developers. The department views this policy as a step toward addressing the supply challenges in the affordable housing market.
The proposal is now open for public comment during a 30-day review period. Click here to read the full memo.
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