FHA Increases Eligibility Threshold for Standard Underwriting for Large Multifamily Loans
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.
Latest from NAHBNow
Economics
May 05, 2026
New Home Sales Rise, Supported by Limited Existing InventorySales of newly built single-family homes rose 7.4% in March, to a seasonally adjusted annual rate of 682,000, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales is up 3.3% from a year earlier.
Economics
May 05, 2026
NAHB Debuts New Resource That Estimates Quarterly Remodeling Spending by StateNAHB is debuting a new resource called the State Projections of Remodeling (SPR) that will provide a quarterly analysis of remodeling activity for each state in the nation based on total dollar volume, market share and change in remodeling spending.
Latest Economic News
Economics
May 04, 2026
Mortgage Rates Climb as Inflation Rebounds and Yields RiseMortgage rates continued to increase in April as ceasefire negotiations remain inconclusive. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.34% in April, 16 basis points (bps) higher than March. The average 15-year rate also increased by 13 bps to 5.69%. Despite the recent increase, both rates remain lower than a year ago by 39 bps and 21 bps, respectively.
Economics
May 01, 2026
Student Housing Construction Investment Holds Steady in the First Quarter of 2026Private fixed investment in student dormitories edged up 0.1% in the first quarter of 2026, holding at a seasonally adjusted annual rate (SAAR) of $3.9 billion. This modest gain marked a third consecutive quarterly increase, despite continued pressures from elevated interest rates. However, on a year-over-year basis, investments in dorms remained almost unchanged.
Economics
Apr 30, 2026
Housing’s Share of GDP Dips Below 16% for First Time Since 2019Housing’s share of the economy was 15.9% in the first quarter of 2026, according to the latest estimates of GDP produced by the Bureau of Economic Analysis. This share is down from 16.0% in the fourth quarter and is lower than 16.5% registered just one year ago.