MBA Supports HUD Multifamily MIP Rate Reduction Proposal
Tucker, Michael email@example.com
The Mortgage Bankers Association commended HUD's proposal to reduce FHA Mortgage Insurance Premiums for some FHA multifamily programs in a letter to HUD.
In January HUD proposed lowering mortgage insurance premiums for certain FHA Multifamily Housing Insurance programs for commitments issued or reissued beginning April 1. MIP rates for mortgage insurance programs under FHA's Office of Healthcare Programs, including health care facilities and hospital insurance programs, would not change under HUD's proposal.
"These proposed MIP changes reflect the health of the FHA Multifamily portfolio, an effort to simplify the rate structure and HUD's commitment to promote its mission initiatives," HUD said in a Federal Register filing.
Robert Warren, Managing Director and FHA Chief Underwriter for Wells Fargo Multifamily Capital, said HUD has taken several recent steps to strengthen FHA multifamily programs and support multifamily rental housing and energy-efficient housing financing, including the proposed MIP reduction. Warren chairs MBA's FHA Multifamily Committee.
"As MBA recommended last year and at subsequent meetings, we believe it is appropriate for HUD to recalibrate MIPs as a reflection of the sustained strong performance of the FHA multifamily insured portfolio with its delinquency rate of less than one-quarter of a percent and because of the growing need for multifamily affordable rental housing," Warren said.
Warren noted that FHA multifamily programs generate positive revenue for the U.S. Treasury.
MBA said FHA production could grow due to the proposed MIP rate reduction, which would strengthen FHA's production platform. FHA Multifamily Accelerated Processing production fell from $17.1 billion in FY2013 to $10 billion in FY2015 as it shrank to four percent of the multifamily finance market.
"Therefore, we appreciate HUD's actions on the proposed MIP reduction, as well as positive aspects of the new MAP Guide, to ensure FHA's sustainable and steadfast role in the rental housing market," Warren said.
MBA President and CEO David Stevens, CMB, noted that a mortgage insurance premium reduction would help build more apartments and allow more families to access affordable and energy-efficient housing. He called the proposal a "significant step" toward expanding affordable and workforce rental housing.
MBA also recommended that HUD apply the MIP reduction to Office of Residential Healthcare Program loans--known as Lean financing. "Section 232 programs are also important in providing affordable rental housing through assisted-living facilities, skilled nursing homes and other residential healthcare properties," the letter said. "And healthcare facilities would equally benefit from HUD's priority to support more energy-efficient properties."