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This week’s HUD events include:
- Fair housing actions for Real Estate Owned properties applauded by HUD
- Temporary COVID-19 underwriting mitigants for multifamily transactions removed
Fair housing actions for Real Estate Owned properties applauded by HUD
Date Posted: February 9, 2022
Last week, the U.S. Department of Housing and Urban Development (HUD) applauded the settlement of cases between Fannie Mae, the National Fair Housing Alliance, and local fair housing organizations to avoid fair housing violations.
This is a result of HUD grants that “supported the investigation into potential disparities in the maintenance and marketing of Real Estate Owned (REO) properties,” according to the HUD press release.
Demetria L. McCain, Principal Deputy Assistant Secretary for HUD’s Office of Fair Housing and Equal Opportunity (FHEO), said:
“It is our hope that settlement of these cases will bring about much needed positive outcomes for these undeserved communities…We also hope mortgage lenders across the country will take steps to avoid fair housing violations in their own REO portfolios.”
HUD’s press release states that “The Fair Housing Act prohibits discrimination in the sale, rental, and financing of dwellings, and in other housing-related transactions, based on race, color, national origin, religion, sex (including gender identity and sexual orientation), familial status, and disability.”
Any person who believes they have experienced housing discrimination can file a complaint to HUD at 1 (800) 669-9777, or by visiting this HUD website.
More information about these settlements can be found here.
Temporary COVID-19 underwriting mitigants for multifamily transactions removed
Date Posted: February 14, 2022
The Federal Housing Administration (FHA) is removing temporary COVID-19 underwriting mitigants for multifamily transactions insured under Section 223(f) of the National Housing Act.
Announced on Monday at the Mortgage Bankers Association Commercial/Multifamily Finance Convention & Expo, this action is “effective immediately for all insured transactions that have yet to reach endorsement,” as stated in the HUD press release.
This removes the temporary requirements of nine months of debt service reserves, 250% repair escrows, and limits on cash-out refinance transactions were set in April, 2020 to counteract potential financial effects from the COVID-19 pandemic.
Lopa Kolluri, Principal Deputy Assistant Secretary for the Office of Housing and FHA said:
“Through actions taken under the Biden-Harris Administration to help the nation recover from the pandemic, including the historic American Rescue Plan, mortgages in FHA’s Multifamily insurance portfolio experienced fewer challenges than expected…Because of this, we are in a position to unleash multifamily development capital by lifting these underwriting safeguards.”
According to the press release, “This change allows lenders to return to using standard Multifamily Accelerated Processing (MAP) Guide policies going forward, which require fewer capital reserves to be held for debt service, a lower percentage of capital to be held in repair escrows, and more flexible requirements for the treatment of cash-out refinance transactions.”
HUD has created a Multifamily Accelerated Processing (MAP) Guide with instructions and requirements for FHA-insured mortgages for multifamily properties. Read the Multifamily Accelerated Processing (MAP) Guide here.