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
Safety
Jul 17, 2026
Keep Workers Safe from Wildfire Smoke on JobsitesWith wildfires raging across Ontario, Canada and smoke impacting huge areas of the Northeast and upper Midwest in the U.S., it is important to know the effects wildfire smoke can have across the country, even if you are not in an area that is at risk for wildfires.
Economics
Jul 17, 2026
Multifamily Gains Lift Overall Starts Despite Single-Family DeclineOverall housing starts increased 19% in June to a seasonally adjusted annual rate of 1.43 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Latest Economic News
Economics
Jul 17, 2026
Multifamily Gains Lift Overall Starts Despite Single-Family DeclineStrong multifamily growth pushed overall housing starts higher in June, while single-family production remained sluggish as elevated mortgage rates, rising construction costs and persistent labor shortages continued to weigh on the market.
Economics
Jul 16, 2026
Builder Sentiment Stays Weak as Affordability Concerns PersistEconomic uncertainty and persistent affordability challenges driven by rising material prices, high land costs, and elevated mortgage rates continue to weigh on builder sentiment.
Economics
Jul 15, 2026
Building Material Prices Continue to Rise Despite Energy Price DeclinesResidential building material prices, excluding energy, rose 0.5% in June and were up 4.6% from a year ago. Lower energy prices were apparent in June, as energy input prices fell 10.3% over the month. Meanwhile, prices for services rose 5.2% over the year, and were up 1.0% from the previous month.