The Federal Housing Administration (FHA) published a Mortgagee Letter that increases the threshold at which a multifamily loan is considered a large loan from $75 to $120 million. This is the first increase in the threshold since 2014 and will enable a greater number of transactions to use standard underwriting processes when submitted for FHA Multifamily insurance.
FHA also announced that it will review the threshold on an annual basis, with the possibility of increasing it in $5 million increments if warranted. The changes are designed to simplify underwriting for multifamily housing development without presenting undue risk to the FHA, and to provide for regular adjustments to the threshold so it does not unduly lag market changes.
