of Federal Housing Administration (FHA) Issued Mortgage Letter (ML) 2023-14 This week, the threshold for multi-family loans considered large loans will be raised from $75 million to $120 million.
This is the first significant increase in the standard since 2014. The purpose of the increase is to “allow more traders to use the standard underwriting process when applying for FHA multifamily insurance,” the agency said.
The FHA also said it would review the threshold annually, leaving room for future increases by $5 million.
The changes to underwriting schedules and loan thresholds are intended to “simplify the underwriting of multifamily developments without exposing the FHA to undue risk,” allowing it to adjust periodically as the market changes. Officials said the aim was to
“We know that renters are battling the dual challenges of rising development costs and meeting the nation’s desperate need for more rental housing,” said FHA Director Julia Gordon. . “Everything we can do to carefully mitigate the extra steps in obtaining FHA insurance will help us all meet the housing challenges before us,” she said.
Another factor is the age of the reference value, which was nearly 10 years before the increase. Ethan HandelmanAssistant Secretary for Housing.
“Revising standards after almost a decade is an important step for us and the industry,” he said. “We want our stakeholders to be able to trust the FHA’s insured financing for a variety of multifamily transactions without unnecessary barriers.”
The new ML says: [Multifamily Accelerated Processing (MAP)] guide This is to reflect the new $120 million threshold and annual review methodology,” the agency said. “Other FHA requirements in the MAP Guide related to large loans remain unchanged.”
