Skip to main content

Multifamily Insurance Rate Cut to Promote Affordability and Green Housing

Phil Hall
Jan 28, 2016
In a two-pronged approach to address issues related to affordable housing and energy efficiency, the Federal Housing Administration (FHA) is reducing the multifamily insurance rate as a solution to bring more capital financing into the creation of rental

In a two-pronged approach to address issues related to affordable housing and energy efficiency, the Federal Housing Administration (FHA) is reducing the multifamily insurance rate as a solution to bring more capital financing into the creation of rental developments.

The rate reductions will take effect April 1 and lowering annual rates on “broadly affordable housing”–where least 90 percent of the units are under Section 8 contract and/or covered by Low Income Housing Tax Credit–to 25 basis points (bps) and lowering rates on affordable mixed-income properties to 35 bps. For energy-efficient properties, the FHA is lowering annual rates to 25 bps. Multifamily insurance rates for market-rate properties that are not energy efficient will remain unchanged.

"NAMB is happy to see a reduction in insurance costs on FHA multifamily," said Rocke Andrews, CMC, CRMS, president of NAMB—The Association of Mortgage Professionals. "Hopefully, this will encourage new building and reduce the cost of housing to many Americans in the rental property market."

“Families across the country are struggling through an affordable housing crisis,” said U.S. Department of Housing and Urban Development (HUD) Secretary Julian Castro. “By reducing our rates, this Administration is taking a significant step to encourage the preservation and development of affordable and energy efficient housing in communities large and small. This way, hard-working families won’t have to make the false choice between quality or affordable housing.”

"HUD's decision today is a positive step toward helping support the need for affordable and more cost efficient rental housing," said David H. Stevens, CMB, president and CEO of the Mortgage Bankers Association (MBA). "Specifically, the reduction in Mortgage Insurance Premiums for FHA loans on multifamily affordable and energy efficient properties may help build more apartments and allow for more families and individuals to access affordable and energy efficient housing. This is one significant element to expand the availability of affordable and workforce rental housing in America and we will continue to advocate for other measures toward these critically important objectives." 

Published
Jan 28, 2016
Freedom Mortgage Earns Upgraded Outlook From KBRA

Strong servicing revenues and efficient cost-cutting measures highlighted; however, concerns raised over lack of hedging on substantial MSR investments.

Oct 04, 2023
Rithm Capital To Acquire Specialized Loan Servicing LLC

Transaction grows Newrez’s third-party servicing business to $180 billion.

Oct 03, 2023
Rocket Pro TPO Takes the Lead With Early Loan Limit Increase

EVP Mike Fawaz underscores the move's competitive edge, marking the firm's second consecutive year ahead of FHFA's anticipated adjustments.

Oct 02, 2023
Congress Passes Legislation To Extend National Flood Insurance Amid Shutdown Concerns

The move ensures continued flood insurance coverage, essential for many homeowners in high-risk flood areas, during peak hurricane season.

Oct 01, 2023
Equity Prime Mortgage Launches BEABLVR.com To Recruit Loan Officers

EPM aims to transform 4,000 retail loan officers into loan originators, emphasizing the growing benefits of the wholesale sector in the housing market.

Oct 01, 2023
Fannie Mae Introduces Spanish-Language Homebuyer Education Program

The new platform, HomeView en Español, aims to bridge language barriers hindering Hispanic-Americans from purchasing homes..

Sep 29, 2023