For fiscal 2022, the Federal Housing Administration (FHA) Office of Multifamily Housing insured 1,078 mortgages for multifamily properties, supporting the affordable financing of 160,000 rental homes. The $21.1 billion of unpaid principal balance marks the second highest volume by dollar amount, slightly below its record dollar volume in fiscal 2021.
The Office of Multifamily Housing, part of the Department of Housing and Urban Development (HUD), also announced the resolution of its queue for reviews of applications submitted for FHA insurance on multifamily mortgages. Operational efficiencies and policy changes throughout fiscal 2022 have been credited with streamlining operations and removing unnecessary barriers to obtaining FHA-insured mortgage financing.
“The queue is resolved. Through a concentrated effort by the entire multifamily team at our regional offices and at HUD headquarters, lenders will no longer experience extended wait times to have their insurance applications assigned to an FHA reviewer,” said Ethan Handelman, deputy assistant secretary for multifamily housing. “Achieving this milestone at a time of record demand for FHA-insured financing showcases our ongoing commitment to facilitating greater multifamily affordable housing development. Our Multifamily Accelerated Processing-approved lenders and borrowers worked right alongside FHA staff to reach this resolution.”
Over the past three fiscal years FHA has experienced unprecedented levels of applications. At the peak in 2021, its application review queue include over 500 mortgage insurance applications waiting to be assigned for review. The queue’s elimination was made possible through the reallocation of resources as well as several policy changes, including:
- A temporary procedural change that allowed eligible pre-applications to convert to firm applications while in the queue and also allowed future eligible applicants to submit a direct-to-firm application. According to the FHA, this change better aligned application information with current market conditions and created improved processing efficiency for borrowers, lenders, and HUD; and
- The publication of the Reserve for Replacement policy in Housing Notice 2022-04 and Mortgagee Letter 2022-12 that allowed lenders to approve requests for withdrawal from a property’s reserve for replacement in certain instance on a delegated basis, creating increased efficiency and a shortened time in processing borrower requests for disbursements.
The Office of Multifamily Housing also announced other key milestones for fiscal 2022, such as issuing $1.6 billion in firm commitments for mortgage insurance through its Federal Finance Bank Risk-Sharing Initiative that will create or preserve over 9,000 affordable rental homes; surpassing $15 billion in construction investment for affordable housing preservation through the Rental Assistance Demonstration program since its inception in 2013; and supporting 1.4 million low-income individuals and families through assisted housing programs.