The U.S. Department of Housing and Urban Development (HUD) finalized a prior notice that reduces mortgage insurance premiums (MIPs) to 0.25 percent for new multifamily loan originations and multifamily refinancing programs through the Federal Housing Administration (FHA).
The HUD notice changes the annual MIP to 25 basis points for the 11 Multifamily Mortgage Insurance Programs specified in the National Housing Act, which is the minimum rate allowed by statute. Without this change in federal policy, multifamily MIPS had ranged anywhere from 25 basis points up to 95 basis points.
The reduction to 25 basis points will apply to the following section of the National Housing Act:
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207 Multifamily New Constr/Sub Rehab w/o LIHTC (currently 70 bps)
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207 Manufactured Home Parks w/o LIHTC (currently 70 bps)
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221(d)(4) New Constr/Sub Rehab w/o LIHTC (currently 65 bps)
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220 Urban Renewal Housing w/o LIHTC (currently 70 bps)
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213 Cooperative (currently 70 bps)
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207/223(f) Refi or Purchase for Apts. w/o LIHTC (currently 60 bps)
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223(a)(7) Refi of Apts. w/o LIHTC (currently 50 bps)
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231 Elderly Housing w/o LIHTC (currently 70 bps)
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241(a) Supplemental Loans for Apts. coop w/o LIHTC (currently 95 bps)
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Section 542(b) Risk-Sharing (currently 25 bps)
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Section 542(b) Risk-Sharing (currently 25 bps)
This reduction notice comes in response to President Trump’s January memorandum entitled “Delivering Emergency Price Relief for American Families and Defeating the Cost-Of-Living Crisis,” which instructed federal agencies to pursue policies that reduce the cost and expand the supply of housing. This finalized version further eliminates MIP categories which were misaligned with the presidential memorandum and have become economically obsolete.
The notice also proposes eliminating three Obama-era rate categories: Affordable Housing, Broadly Affordable Housing and Green/Energy Efficient Housing. The notice acknowledges that these separate categories, which are set at the 25-basis point rate, will become obsolete once the new MIPs are finalized. Additionally, HUD points to Executive Order 14154, “Unleashing American Energy,” which shifts the federal government’s priorities away from green and energy-efficient goals.
The revised MIP will be effective for any FHA multifamily mortgage insurance applications submitted or amended on or after October 1, 2025, if the loan has not been initially endorsed. The National Apartment Association (NAA) applauds HUD and FHA efforts to lower financing costs and boost rental housing development. We look forward to continuing our advocacy with the Trump Administration to advance our shared goals of increasing supply and reducing regulatory burdens on housing providers that ultimately impact the cost of housing.