New FHA Multifamily Mortgage Insurance Applications Halted in Texas Disaster Areas

Filed in Multifamily by on September 8, 2017 0 Comments

apartmentNAHB has learned that HUD will no longer accept new applications for FHA multifamily mortgage insurance in the counties impacted by Hurricane Harvey and designated as Presidentially Declared Disaster (PDD) areas.

In a directive to all of its multifamily regional center directors, HUD also said that applications already in the processing stage with sites located in the PDD areas will be delayed up to 90 days or until further notice.

Moreover, due to the shortage of HUD staff and the need to direct additional manpower to areas affected by hurricanes Harvey and Irma, lenders, borrowers and other affected program participants across the nation should expect two-week delays in processing applications well into the fall.

NAHB contacted HUD to express strong concern over the effect of these delays on recovery and rebuilding efforts in the storm-affected communities.

“HUD’s directive to immediately halt new applications and delay those that are pending for FHA multifamily mortgage insurance could undermine efforts to meet the urgent housing needs of countless Americans displaced by this natural disaster,” said NAHB chair Granger MacDonald in an official statement.

HUD clarified that it does not expect a lengthy moratorium on applications for multifamily mortgage insurance and that it would be issuing more detailed guidance for applicants as soon as the agency has assessed the impact of the storm on its existing portfolio and pipeline of new projects.

An Urgent Message to the HUD Secretary

In a letter to HUD Secretary Ben Carson, NAHB has asked the agency to dedicate additional resources to speed the assessment process and to reopen the application window as soon as possible. Many building sites located within PDD areas incurred no flood or other storm-related damage.

We also stressed that if FHA multifamily mortgage insurance applications are blocked or tied up for extended periods, the recovery process in Texas and Louisiana will be impeded and efforts to meet the housing needs in these areas will be undermined.

NAHB urged HUD to act promptly to announce a clear and decisive plan for processing applications for multifamily mortgage insurance that will allow processing to resume in the immediate future. We further stated that the recovery cannot make headway without a functioning FHA multifamily mortgage insurance program.

HUD has agreed to provide further information on a call with NAHB members next week and said it will issue more details on application processing in the next two to three weeks.

We are also working with lawmakers on Capitol Hill, raising this issue with the White House and actively engaging with the media to send the message that this is not the time to disrupt the housing recovery and rebuilding efforts.

NAHB will continue to work aggressively and tirelessly on all fronts to get HUD to promptly resume processing FHA multifamily mortgage insurance applications in the storm-impacted areas as well as to swiftly process FHA multifamily mortgage applications in other parts of the country.

For more information, contact Michelle Kitchen at 800-368-5242 x8352.

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