The Department of Housing and Urban Development (HUD) published a Federal Register notice proposing to establish a uniform 25 basis point multifamily Mortgage Insurance Premium (MIP) rate annually across all FHA multifamily programs. According to HUD, the proposal aims to lower financing costs and stimulate rental housing development.
The proposal would eliminate separate rate categories for market-rate, affordable housing, and green building properties. Under the current system, market-rate properties pay 60-70 basis points annually, affordable housing pays 45 basis points, and properties meeting green building standards pay 25 basis points. The proposal would replace this tiered structure with a uniform rate and eliminate associated program requirements.
HUD is accepting comments through July 28, 2025. Implementation is subject to final rule adoption.
The proposed rate changes could affect financing options for multifamily properties. NAR members working with multifamily clients should be aware of potential changes to FHA loan terms.