HUD Issues Notice on FY-2014 MIPs; Clarifies Policy for LIHTC & Affordable Properties





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HUD has issued a notice announcing that mortgage insurance premiums (MIPs) for Federal Housing Administration (FHA) Multifamily, Healthcare Facilities, and Hospital mortgage insurance programs that have commitments to be issued or reissued in FY-2014 will remain the same as in FY-2013.

Additional LIHTC Guidance

This notice also clarifies that that projects with either new LIHTC generated as a result of or in conjunction with the new FHA financing and projects with existing LIHTC are eligible to benefit from the LIHTC MIPs. The eligibility of projects with existing LIHTC is intended to support the preservation of already-operating, affordable housing for low-income renters.

Eligible projects with “existing” LIHTCs must meet the following criteria of affordability consistent with guidance given in Mortgagee Letter 2010-21 to benefit from the LIHTC MIPs:

  1. Projects that have a recorded regulatory agreement in effect for at least 15 years after final endorsement and monitored by competent public authority;
  2. Projects that meet at least the minimum LIHTC restrictions of 20 percent of units at 50 percent of the Area Median Income (AMI); or 40 percent of units at 60 percent of AMI, with economic rents (i.e., the portion paid by the tenants) on those units no greater than LIHTC rents; and
  3. Mixed income projects if the minimum low income unit rent and occupancy restrictions and regulatory agreement meet the above criteria.

Loans for properties with an active Project-Based Section 8 contract covering any of the units continue to be exempt from the increases established with the FY 2013 MIPs, which means that FY 2014 loans are subject to the “with LIHTC” rates for the programs stated below. Loans with other affordability requirements, i.e., not LIHTC or Project-Based Section 8, may likewise be eligible for the “with LIHTC” rates, provided the affordability requirements are equivalent to all of the criteria described above for “existing” LIHTCs.

Clarifying Upfront Insurance Fee Under Section 223(a)(7)

Clarification is also provided in regards to the upfront or first-year MIP amount charged for FHA mortgage insurance under Section 223(a)(7) of the National Housing
Act, which is 50 basis points (bps) for both affordable and market rate properties for Multifamily, Healthcare Facilities, and Hospital mortgage insurance programs. This Notice does not apply to loans insured under the Risk Sharing programs of section 542(b) or 542(c) of the Housing and Community Development Act of 1992.

Positive Credit Subsidy Programs

HUD will continue to suspend issuance and reissuance of commitments under two programs that have previously required positive credit subsidy: Section 221(d)(3) New Construction/Substantial Rehabilitation (NC/SR) for Nonprofit/Cooperative Mortgagors without LIHTC and Section 223(d) Operating Loss Loans for Apartments.

The MIPs to be in effect for FHA Firm Commitments issued or reissued in FY 2014 are shown in the chart below:

FHA Multifamily MIPs

FHA Program

Basis Points

207 Multifamily Housing New Construction/Sub Rehab without LIHTC

70

207 Multifamily Housing New Construction/Sub Rehab

with LIHTC

45

207 Manufactured Home Parks without LIHTC

70

207 Manufactured Home Parks with LIHTC

45

221(d)(3) New Construction/Substantial Rehabilitation (NC/SR) for Nonprofit/Cooperative mortgagor without LIHTC

N/A

221(d)(3) Limited dividend with LIHTC

45

221(d)(4) NC/SR without LIHTC

65

221(d)(4) NC/SR with LIHTC

45

220 Urban Renewal Housing without LIHTC

70

220 Urban Renewal Housing with LIHTC

45

213 Cooperative

70

207/223(f) Refinance or Purchase for Apartments without LIHTC

60*

207/223(f) Refinance or Purchase for Apartments with LIHTC

45*

223(a)(7) Refinance of Apartments without LIHTC

50**

223(a)(7) Refinance of Apartments with LIHTC

45**

223d Operating Loss Loan for Apartments

N/A

231 Elderly Housing without LIHTC

70

231 Elderly Housing with LIHTC

45

241(a) Supplemental Loans for Apartments/coop without LIHTC

95

241(a) Supplemental Loans for Apartments/coop with LIHTC

45

* The first-year or upfront MIP fee for loans insured under Section 223(f) for Multifamily, Healthcare Facilities, and Hospital programs is 100 basis (one percent) points. The annual MIP amounts are otherwise shown above for the respective Section 223(f) programs.

** The first-year or upfront MIP fee for loans under Section 223(a)(7) for Multifamily, Healthcare Facilities, and Hospital programs is 50 basis points. The annual MIP amounts are otherwise shown above for the respective Section 223(a)(7) programs.

FHA Healthcare Facilities (Nursing Homes, ALF & B&C) MIPs

FHA Program

Basis Points

232 NC/SR Healthcare Facilities without LIHTC

77

232 NC/SR–Assisted Living Facilities with LIHTC

45

232/223(f) Refinance for Healthcare Facilities without LIHTC

65*

232/223(f) Refinance for Healthcare Facilities with LIHTC

45*

223(a)(7) Refinance of Healthcare Facilities without LIHTC

55**

223(a)(7) Refinance of Healthcare Facilities with LIHTC

45**

223d Operating Loss Loan for Healthcare Facilities

95

241(a) Supplemental Loans for Healthcare Facilities without LIHTC

72

241(a) Supplemental Loans for Healthcare Facilities with LIHTC

45

* The first-year or upfront MIP fee for loans insured under Section 223(f) for Multifamily, Healthcare Facilities, and Hospital programs is 100 basis (one percent) points. The annual MIP amounts are otherwise shown above for the respective Section 223(f) programs.

** The first-year or upfront MIP fee for loans under Section 223(a)(7) for Multifamily, Healthcare Facilities, and Hospital programs is 50 basis points. The annual MIP amounts are otherwise shown above for the respective Section 223(a)(7) programs.

DATES: Effective Date: October 1, 2013.

Click here to view the notice.