FHA to cut insurance rates on multifamily mortgages
WASHINGTON – Jan. 29, 2016 – The Federal Housing Administration (FHA) announced a multifamily insurance rate reduction designed to encourage capital financing of affordable and energy-efficient apartments. The rate reductions take effect on April 1, 2016, and directly impact FHA's Multifamily Housing Programs and properties housing low- and moderate-income families and/or developments that install energy-efficient systems or build within federal energy guidelines.
FHA's new multifamily insurance rates are available online.
HUD Secretary Julián Castro announced the changes during a visit to an affordable housing complex in Columbus, Ohio. FHA estimates that multifamily insurance rate reductions will spur the rehabilitation of an additional 12,000 units of affordable housing per year nationally. If so, it says nearly 40,000 families could benefit over the next three years.
"Families across the country are struggling through an affordable housing crisis," said Secretary Castro. "By reducing our rates, this Administration is taking a significant step to encourage the preservation and development of affordable and energy efficient housing in communities large and small. This way, hard-working families won't have to make the false choice between quality or affordable housing."
FHA's new annual multifamily insurance rates include:
FHA is also reducing upfront premiums to support the affordable housing and energy efficiency goals. Upfront insurance rates will be set at 25 basis points for broadly affordable and energy-efficient properties and 35 basis points for mixed-income properties. Upfront premiums for market rate properties that are not energy-efficient remain unchanged.
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