A group of national trade organizations representing organizations involved in the development, construction, ownership, and management of market rate and affordable multifamily rental housing and health care facilities sent a letter to HUD regarding the agency’s recent increase of mortgage insurance premiums (MIPs) for certain FHA multifamily housing, health care facilities, and hospital mortgage insurance programs for commitments to be issued or reissued in FY2013. HUD’s Notice states that the MIP increases will provide additional protection for the GI/SRI fund, increase receipts to the Treasury, and will encourage private lending to return to the market by ensuring FHA is not under-pricing its risk. The letter states, however, that the purpose of MIPs is not to increase receipts to the Treasury nor to adjust FHA’s pricing of credit risk relative to current private market pricing, and increasing MIPs will only add to property owner’s costs, thereby affecting rents. Furthermore, HUD’s Notice provides no analysis of the need for the increased MIPs or the impact of the proposed increase on borrowers, lenders or renters who live in properties insured under the program.
Click here to read the letter.
