In welcome news for the industry, lenders and developers, on September 23, 2025, the Federal Housing Administration’s (FHA) Office of Multifamily Housing Programs published a Federal Register final notice that reduces Multifamily Mortgage Insurance Premiums (MIPs) to 0.25% across all FHA Multifamily programs. This Notice does not apply to HUD’s healthcare facility financing programs.
Background/History
President Donald Trump signed a presidential memorandum Jan. 20, “Delivering Emergency Price Relief for American Families and Defeating the Cost-Of-Living Crisis,” and an Executive Order on Unleashing American Energy. As a result, the Department of Housing and Urban Development (HUD) published its June 26 notice proposing changes to the MIP structure. This is the final notice and becomes effective Oct. 1.
Going Forward
HUD has taken the position that the underlying basis of the Green MIP designation has achieved its purpose and is no longer necessary after market maturity. More broadly, HUD data shows that from March 2024 to March 2025, only 4% of Section 221(d)(4) and 223(f) loan closings were for market rate properties without green or affordable incentive qualification, underscoring the high demand for the 0.25% MIP level.
In response to current market conditions, to lower the financing cost, and to expand the supply of rental housing, effective Oct. 1, HUD will standardize and reduce MIP rates to 0.25% of the insured loan amount for all multifamily housing programs.
This MIP change will apply to all applications that have been submitted to HUD for processing but will not close until Oct. 1 and beyond. After Oct, 1, projects with Firm Commitments can be amended to reflect the new rate and to remove special conditions relating to legacy MIP reduction obligations. So long as the project has not yet closed (i.e., achieved initial endorsement), the MIP rate can be amended to conform to the new guidance.
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