January 29, 2016
The FHA has issued a press release announcing an insurance rate cut for FHA insured multi-family home loans. According to HUDNo.16-008, “In an effort to help preserve and increase the amount of affordable, quality rental housing across the country, the Federal Housing Administration (FHA) today announced a multifamily insurance rate reduction designed to encourage capital financing of affordable and energy-efficient apartments.”
The rate reductions announced in the press release are scheduled to take effect on April 1, 2016, and according to the FHA officials site, “directly impact FHAs Multifamily Housing Programs and properties housing low- and moderate-income families and/or developments installing energy-efficient systems or building within federal energy guidelines.”
The press release also adds, “U.S. Housing and Urban Development (HUD) Secretary Julin Castro made the announcement today during a visit to an affordable housing complex in Columbus, Ohio.” According to the press release, multifamily insurance rate reductions could lead to or at least encourage the rehabilitation of an additional 12,000 units of affordable housing per year nationally.
Families across the country are struggling through an affordable housing crisis, said Secretary Castro, who was quoted in the press release. He adds, 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 wont have to make the false choice between quality or affordable housing.
The usual scope of this blog is to discuss FHA single-family home loans, but this press release is important for two reasons; one is the encouragement of the FHA for more affordable housing across the U.S. but the other is that it’s important to make the distinction between single-family home loans and multi-family loans. The information in the press release quoted here does NOT affect FHA single-family mortgages.
Borrowers who hear of a mortgage insurance rate reduction should ask whether that reduction pertains to single-family loans or multi-family FHA home loans, which are quite different than the kind of loan a typical house hunter needs to purchase a single-family residence. Should FHA make a similar announcement for single-family home loans, we will report it here.
Do you work in residential real estate? You should know about the free tool offered by FHA.com. It is designed especially for real estate websites; a widget that displays FHA loan limits for the counties serviced by those sites. It is simple to spend a few seconds customizing the state, counties, and widget size for the tool; you can copy the code and paste it into your website with ease. Get yours today:
http://www.fha.com/fha_loan_limits_widget
Joe Wallace has been specializing in military and personal finance topics since 1995. His work has appeared on Air Force Television News, The Pentagon Channel, ABC and a variety of print and online publications. He is a 13-year Air Force veteran and a member of the Air Force Public Affairs Alumni Association. He was Managing editor for www.valoans.com for (8) years and is currently the Associate Editor for FHANewsblog.com.
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