WASHINGTON — The Federal Housing Administration is expanding a pilot program to streamline mortgage insurance applications for affordable housing developments, the Department of Housing and Urban Development announced Thursday.
The pilot was launched in 2012 to create a separate processing track to simplify FHA mortgage insurance applications for projects with equity from the sale of low-income housing tax credits — specifically applications to refinance mortgage debt. The expanded program will now include applications for new construction and substantial rehabilitation.
“Today, we take another important step to stimulate capital investment in affordable housing at a time when we need affordable housing more than ever,” HUD Secretary Ben Carson said in a statement. “We’re also applying the lessons we’ve learned from our earlier pilot program to streamline our processing for new construction and substantial rehabilitation developments, so we can get these deals done quicker and more efficiently.”
The expansion of the program will guarantee faster processing for low-risk transactions, cutting processing time from 90 days to 30 days under an expedited approval process and 60 days under a standard approval process. This shortened review period will help borrowers obtain lower interest rates sooner, which is “an important capability in a rising interest rate environment,” HUD said in a release.
Under the newest version of the program, the agency will have the ability to support the construction and preservation of more affordable multifamily housing, according to HUD.
The pilot will also support and boost long-term investment in Opportunity Zones, which are census-designated tracts in low-income communities.
HUD’s Office of Multifamily Development will oversee projects processed under the program and will provide guidance to designated underwriters to resolve issues when necessary.
