The Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), has updated its policies for wind and “named storm” insurance coverage for multifamily properties financed with an FHA-insured mortgage.
In announcing the move, federal officials noted that “insurance costs for multifamily properties have risen significantly in recent years, largely due to the greater frequency and severity of storms resulting from climate change.”
The updates seek to provide lenders and property owners greater flexibility in obtaining and negotiating property insurance premiums from insurance carriers so developments can obtain the coverage they need without unduly jeopardizing their financial stability.
Effective immediately, FHA is increasing the maximum permissible wind or named storm deductible to the greater of $50,000 or 5% of the insurable value per location, up to a maximum amount of $475,000 per occurrence, announced HUD.
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