FHA Loan Limits Pose Setbacks for Multifamily Production
FHA Multifamily mortgage insurance programs whose statutory mortgage limits are different for buildings with elevators and those those without them have proved to be yet another hurdle for future multifamily housing. The Mortgage Bankers Association (MBA), using the RS Means construction estimator, has determined that there is a 45% difference in per-square-foot construction costs for labor and materials between a non-elevator apartment and an elevator apartment in buildings from eight to 24 stories.
 NAHB is in support of MBA's efforts to harness industry support for a legislative proposal that would establish a 50% differential between the non-elevator and elevator loan limits in each FHA insurance program and each unit size.
An analysis of HUD data shows that, over the past seven years, there have been 478 Section 221(d)(4) new construction projects endorsed by FHA, but only 31 of those involved elevator buildings. A recent lender survey shows that there are 52 projects with more than 11,000 units in elevator buildings being held up because the loan limits are too low to be financed with FHA.
More information will be provided in upcoming issues of Multifamily Hotline.
For more information, e-mail Claudia Kedda or contact her at 800-368-5242 x8352.
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