HUD’s Housing Notice 2019-07 provides incentives for multi-family property owners to invest in Opportunity Zones across the nation. The new incentives offered by FHA are available immediately for applicants of market-rate properties that have not yet submitted a pre-application and for applicants for affordable properties that have not yet applied. HUD is improving the procedure for processing these applications by designating HUD Senior Underwriters to process applications. Applicants to FHA’s Section 221(d)(4), Section 220 and Section 223(f) will be eligible for significantly lower application fees provided the property is located within an Opportunity Zone.
- For broadly affordable housing transactions in Opportunity Zones, the FHA mortgage insurance application fee may be reduced from the current fee of $3 to $1 per thousand dollars of the requested mortgage amount.
- With this change, an average sized broadly affordable development would see its rate reduced from $71,377 to $23,792—a savings of about $47,000.
- Broadly affordable means that at least 90% of the units are Section 8 or deemed affordable under the LIHTC program.
- For market rate and affordable housing transactions in Opportunity Zones, the FHA mortgage insurance application fee may be reduced from the current fee of $3 to $2 per thousand dollars of the requested mortgage amount.
- With this change, an average sized affordable or market rate development would see its rate reduced from $71,377 to $47,583—a savings of about $24,000.
- Affordable means that at least 10% of the units are Section 8 or deemed affordable under the LITHC program.
