The Federal Housing Administration (FHA) is proposing to reduce mortgage insurance premium (MIP) rates to 25 basis points for all multifamily housing programs in response to the sharp rise in construction costs and mortgage interest rates since 2021. Following the Federal Register notice, the Department of Housing and Urban Development (HUD) will solicit public comments for 30 days.
HUD also proposes to eliminate the Green and Energy Efficient Housing, Affordable, and Broadly Affordable MIP rate categories, which were introduced in 2016, with the agency noting they have become obsolete with the leveling of all programs to 25 basis points.
“At HUD, we’re mission-minded and focused on helping put affordable housing within reach for hardworking Americans,” said secretary Scott Turner. “By leveling MIPs and cutting cost-inflating regulations, we’re unlocking competitive financing and driving down costs across the board to spur development. For too long, access to housing has been tied to obsolete, ideological mandates. Under President Trump’s leadership, Americans are no longer forced to subsidize misguided and inefficient green energy crusades at the expense of real housing solutions.”
The Mortgage Bankers Association applauded the action.
“MBA has long advocated for sensible changes that can make HUD’s multifamily lending programs more effective, with a goal of lowering rental housing costs by boosting supply,” said president and CEO Bob Broeksmit. “We commend HUD secretary Scott Turner and his team for being responsive to our recommendations on this issue. Leveling upfront and annual mortgage insurance premiums will help increase rental housing production and improve affordability for renters across the country.”
