FHA Extends Multifamily Risk-Sharing Initiative Through Dec. 31

Filed in Housing Finance, Multifamily by on October 1, 2018 0 Comments

31 Dec on a calendarThe Federal Housing Administration (FHA) announced on Sept. 28 that the agency will extend its multifamily risk-sharing initiative with the Federal Financing Bank (FFB) for eligible housing finance agencies (HFAs) through Dec. 31.

The initiative was originally scheduled to cease accepting new applications for commitments from HFAs on Sept. 30, but extended the initiative through year’s end, up to the current program maximum of $3 billion. NAHB joined several other industry groups in a letter requesting that the program continue.

The program allows state HFAs to underwrite multifamily loans as long as they share in the risk to provide reimbursements to HUD for a portion of any insured losses. HFAs use their own underwriting standards and assume at least 50% of the risk of a loss.

In announcing the extension, FHA said it intends to review the program’s effectiveness, and whether market conditions justify its continued operation. If the program is extended for a limited time period beyond 2018, HUD would identify the parameters under which it would be phased out.

The program was started in 2015 to stimulate affordable housing production in response to tightening bond markets and lack of private sector funding and liquidity that followed the financial crisis.

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

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