FHA cuts multifamily insurance rates

​​​WASHINGTON, D.C. – To help preserve and increase the amount of affordable, quality rental housing across the country, the Federal Housing Administration (FHA) recently announced a multifamily insurance rate reduction designed to encourage capital financing of affordable and energy-efficient apartments.

The rate reductions take effect April 1.

FHA’s new annual multifamily insurance rates include:

• For "broadly affordable" housing (at least 90 percent of the units are under Section 8 contract and/or covered by Low Income Housing Tax Credit [LIHTC] affordability requirements), FHA is lowering annual rates to 25 basis points, a reduction of 20 or 25 basis points from current rates. 
• For affordable mixed-income properties (properties that set aside units based on affordability, including partial LIHTC, partial Section 8, inclusionary zoning, or other local affordability requirements), FHA is lowering annual rates to 35 basis points, a reduction of 10 to 35 basis points from current rates.
• For energy-efficient properties (those committed to industry-recognized green building standards and committed to energy performance in the top 25 percent of multifamily buildings nationwide), FHA is lowering annual rates to 25 basis points, a reduction of 20 to 45 basis points. Qualification for the top 25 percent will be determined using EPA’s Portfolio manager 1-100 score. 

To ensure that the broadly affordable and energy-efficien​t properties benefit directly from the lower rates, FHA will limit the fees that can be charged on these loans.

Multifamily insurance rates for market-rate properties that are not energy efficient​​ will remain unchanged.