Representatives of the National Council of Affordable Housing Market Analysts (NCAHMA) and the National Housing & Rehabilitation Association met with key officials of the U.S. Department of Housing Department (HUD) on February 5 to discuss planned changes to its Federal Housing Administration (FHA) multifamily mortgage insurance programs and ways to enhance them from a market study perspective.
NCAHMA and NH&RA officials, including Bob Lefenfeld, Peter Bell, and Thom Amdur, met with HUD officials Chris Tawa, Joyce Allen, and Dan Sullivan.
In updating its guide for the FHA Multifamily Accelerated Processing (MAP) Program, HUD is proposing to break down FHA multifamily lending into four categories of business, and to require lenders to obtain separate approval for each. For example, the most basic approval would be to originate refi loans, while the second level up would allow both refis and loans on low-income housing tax credit projects. At present, a MAP lender needs only a single approval to make all types of FHA multifamily loans.
HUD is also proposing to tighten its underwriting criteria and standards for its various multifamily mortgage insurance programs.
In addition, HUD is updating its market study guidelines for projects seeking FHA-insured multifamily loans. NCAHMA is submitting recommendations to HUD for improvements to the current FHA market study guidelines. It is proposing that HUD incorporate new guidelines based on NCAHMA’s model content standards for market studies for affordable multifamily rental housing projects, including housing credit developments.
At present, both an appraisal and a market study must be performed for a multifamily project to enable it to receive an FHA-insured loan. A proposed change would separate the appraisal and the market study, requiring the market study to be prepared by a different qualified professional than the person that prepares the appraisal. This would expand opportunities for market analysts who aren’t also appraisers to prepare market studies for FHA projects.
HUD officials are also examining possible ways to revise the MAP program to enable multifamily projects in high-cost markets to qualify for FHA loans. The current FHA loan limits and other rules effectively prevent projects in many high-cost areas from being eligible for FHA financing.
