FHA Increases Eligibility Threshold for Standard Underwriting for Large Multifamily Loans

Housing Finance
Published
Contact: Michelle Kitchen
[email protected]
Senior Director, Multifamily Finance
(202) 266-8352

The Federal Housing Administration (FHA) today announced increases to the threshold for large multifamily loans from $75 million to $120 million. This is the first increase in the threshold since 2014 and will enable more FHA multifamily insurance applicants to use standard underwriting processes. FHA also announced it will review the threshold on an annual basis, with the possibility of increasing it in $5 million increments if warranted.

This change addresses the single-point risk of loss created by large individual loans and defines the underwriting standards for large multifamily loans. Except where otherwise stated, these policies do not apply to loans below the large loan threshold or to loan applications under Section 223(a)(7), which is the program to refinance existing FHA-insured multifamily loans.

Revisions have also been made to the Multifamily Accelerated Processing (MAP) Guide to reflect the new $120 million threshold and the annual review methodology. FHA’s other requirements in the MAP Guide related to large loans remain unchanged.

HUD’s risk analysis and industry feedback showed this upward revision was prudent, primarily because of increases in housing and construction costs over the last decade, without providing undue risk to the FHA insurance fund. The changes also allow for regular adjustments to the threshold to avoid undue lag in market changes.

“We know that borrowers are contending with the dual challenges of increased development costs and meeting the nation’s dire need for more rental housing,” said Assistant Secretary for Housing and Federal Housing Commissioner Julia Gordon in a press release. “Anything we can do to prudently alleviate extra steps in obtaining FHA insurance will help all of us meet the housing supply challenges before us.”

NAHB advocated for and strongly supports this change. It is necessary to account for increased construction costs and to increase the supply of apartments affordable to low- and moderate-income families.

For more details, see Mortgagee Letter 2023-14.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Safety

Jul 01, 2025

Use NAHB Resources to Protect Workers from Heat and UV Exposure

As NAHB celebrates UV Safety Awareness Month in July, it is important for home builders and general contractors to educate workers about the potential risks associated with UV radiation, and have plans and resources in place to keep them safe on the jobsite.

Advocacy

Jul 01, 2025

Senate Passes Tax Bill With Many Wins for NAHB Members

The Senate today passed the One Big Beautiful Bill Act (H.R. 1) — sweeping tax and domestic policy legislation that includes several important housing and business provisions that will benefit small businesses, real estate and our members. Most notably, NAHB was able to secure key wins regarding state and local tax deductions for individuals and pass-through businesses.

View all

Latest Economic News

Economics

Jul 01, 2025

May Private Residential Construction Spending Dips

Private residential construction spending fell by 0.5% in May, marking the fifth straight month of decreases. This drop was primarily driven by reduced spending on single-family construction. Compared to a year ago, total spending was down 6.7%, as the housing sector continues to navigate the economic uncertainty stemming from ongoing tariff concerns and elevated mortgage rates.

Economics

Jul 01, 2025

Flat Job Openings for Construction

The count of open, unfilled positions in the construction industry held steady amid a slowdown for housing, per the May Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS).

Economics

Jun 30, 2025

2024 New Single-Family Starts by Census Division

Despite persistently high mortgage rates, elevated financing costs for builders, and a shortage of buildable lots, single-family starts rebounded in 2024, following two straight years of declines.