HUD Issues Timeline for FHA Multifamily Applications in Harvey-Impacted Areas

Filed in Disaster Response, Multifamily by on September 29, 2017 0 Comments

In the aftermath of Hurricane Harvey, HUD announced that it was suspending applications for new FHA multifamily mortgage insurance applications in counties affected by the storm and designated as Presidentially Declared Disaster (PPD) areas while it assessed damage to its insured and assisted portfolio. HUD also said applications already being processed would be delayed up to 90 days.

NAHB immediately urged HUD to re-open applications as soon as possible, and to announce a clear and decisive plan for processing applications for multifamily mortgage insurance. “The recovery cannot make headway without a functioning FHA multifamily mortgage insurance program,” NAHB’s letter to HUD Secretary Ben Carson stated.

We also took our concerns to Congress, the White House and the media to reiterate that this is not the time to disrupt the housing recovery and rebuilding efforts.

In response to our outreach, HUD today issued a memo announcing a timetable for accepting new multifamily mortgage insurance applications. Highlights include:

For Business Outside the PDD Areas

  • Lenders should continue to submit new applications for mortgage insurance.
  • The Southwest Region will schedule Concept Meetings for new business starting Oct. 9.

For Business Within the PDD Areas

  • For Firm Commitments that have been issued but not closed, HUD will work with lenders to close the loans as expeditiously as possible. Each Firm Commitment will be amended to require a lender certification on the property condition. Firm Commitment amendment letters will be sent within the next several days.
  • For FHA mortgage insurance applications submitted before the PDD event, HUD staff will commence reviewing applications upon receipt of a lender certification and updated property-specific due diligence. HUD will contact lenders within the next several days to discuss project-specific due diligence updates.

For New Applications Within the PPD Areas

  • Starting Oct. 2, applications for new FHA multifamily mortgage insurance will be accepted for properties with Low Income Housing Tax Credits.
  • Applications for mortgage insurance on properties that do not have LIHTCs will be accepted starting Oct. 23. Lenders must provide updated due diligence as appropriate and a certification that the properties have been inspected by the lender and/or third party consultants after Sept. 3.
  • A HUD-prescribed certification will be furnished at the time of application submission to verify hurricane impact updates to the application. HUD will consider timing waivers of up to 90 days for third-party reports as long as they have been updated to reflect post-Harvey property and market conditions.

NAHB has scheduled a call with HUD officials on Oct. 2 to discuss the memo and next steps. Please contact Michelle Kitchen, 202-266-8352, with any questions.

Facebooktwitterlinkedinmail

Tags: ,

Leave a Reply

Your email address will not be published. Required fields are marked *

Advertisement