Citing resilient performance across its multifamily portfolio, the Federal Housing Administration (FHA) has removed temporary COVID-19 related underwriting mitigants for HUD 223(f) multifamily loans. The eliminated underwriting requirements include:
- Nine months of debt service reserves (DSR)
- Requirements for 250% repair escrows
- Limits on cash-out refinance transactions
The walk back comes just under two years after FHA implemented the requirements on April 10, 2020 in a measure aimed at counterbalancing risk from potential increased vacancy, rent collection losses and income disruption. Since that time, the overall FHA Multifamily portfolio has proven itself consistently resilient to significant COVID-19 impacts with a less than 1% default rate, according to an FHA press release.
The HUD 223(f) loan program is for the refinance or acquisition of existing market rate, affordable or rental assisted multifamily properties. As an FHA MAP-approved lender, NewPoint offers access to the best rates and terms for qualifying multifamily projects. To learn more, contact a member of our Originations or FHA Lending team.