E8-4600. Multifamily Mortgage Insurance Premiums; Withdrawal of Proposal To Implement Changes in Mortgage Insurance Premiums for FY2008

AGENCY:

Office of the Assistant Secretary for Housing—Federal Housing Commissioner, HUD.

ACTION:

Final notice.

SUMMARY:

On October 18, 2007, HUD published, for public comment, a notice announcing proposed changes in the mortgage insurance premiums (MIP) for certain Federal Housing Administration (FHA) multifamily mortgage insurance programs whose commitments will be issued or reissued in Fiscal Year (FY) 2008. Based on consideration of the concerns raised in the public comments, HUD has decided not to proceed with implementation of the proposed MIP increases for FY2008. The MIPs in effect during FY2006 and FY2007 will be the same rates applied to commitments issued or reissued in FY2008.

FOR FURTHER INFORMATION CONTACT:

Eric Stevenson, Director, Policy Division, Office of Multifamily Development, Department of Housing and Urban Development, 451 Seventh Street, SW., Washington, DC 20410-8000, Telephone: [phone] (this is not a toll-free number). Hearing- or speech-impaired individuals may access these numbers through TTY by calling the Federal Information Relay Service at [phone] (this is a toll-free number).

SUPPLEMENTARY INFORMATION:

I. Background

HUD's regulations at 24 CFR 207.252, 207.252a, and 207.254 provide that instead of setting the MIP at one specific rate for all programs, the Secretary is permitted to change an MIP program by program within the full range of HUD's statutory authority of one fourth of one percent to one percent of the outstanding mortgage principal per annum through a notice, as provided in section 203(c)(1) of the National Housing Act (the Act) (12 U.S.C. 1709(c)(1)). The regulation at 24 CFR 207.254 states that HUD will provide a 30-day period for public comment on notices changing MIPs in multifamily insured housing programs.

On October 18, 2007 (72 FR 59150), HUD published a notice that proposed changes in MIPs for certain FHA multifamily mortgage insurance programs whose commitments will be issued or reissued in FY2008. HUD provided a 30-day public comment period which closed on November 19, 2007. HUD received approximately 179 comments, which included letters from members of Congress, trade associations and other interested members of the public. All commenters expressed opposition to the proposed changes. Based on consideration of the concerns raised in public comments, HUD has decided not to proceed with implementation of the proposed MIP increases for FY2008. The MIPs originally published on August 30, 2005 (70 FR 51538) and in effect during FY2006 and FY2007 will be the same rates applied to commitments issued or reissued in FY2008, and are set out in Section II of this notice.

II. FY2008 Mortgage Insurance Premiums

The mortgage insurance premiums to be in effect for FHA firm commitments issued or reissued in FY 2008 are shown in the table below. For all projects with low-income housing tax credits (LIHTC) the sponsor is required under the Department of Housing and Urban Development Reform Act of 1989 (Pub. L. 101-235 (approved December 15, 1989)) and HUD's implementing instructions to submit a certification regarding governmental assistance with all multifamily mortgage insurance applications.

Fiscal Year 2008 MIP Rates—Multifamily Loan Program

Loan program	Basis points
207 Multifamily Housing NC/SR without LIHTC	50
207 Multifamily Housing NC/SR with LIHTC	45
207 Manufactured Home Parks without LIHTC	50
207 Manufactured Home Parks with LIHTC	45
221(d)(3) Nonprofit/Cooperative mortgagor without LIHTC	80
221(d)(3) Limited dividend with LIHTC	45
221(d)(4) NC/SR without LIHTC	45
221(d)(4) NC/SR with LIHTC	45
232 NC/SR Health Care Facilities without LIHTC	57
232 NC/SR—Assisted Living Facilities with LIHTC	45
220 Urban Renewal Housing without LIHTC	50
220 Urban Renewal Housing with LIHTC	45
213 Cooperative	50
231 Elderly Housing without LIHTC	50
231 Elderly Housing with LIHTC	45
207/223(f) Refinance or Purchase for Apartments without LIHTC	*45
207/223(f) Refinance or Purchase for Apartments with LIHTC	*45
232/223(f) Refinance for Health Care Facilities without LIHTC	*50
232/223(f) Refinance for Health Care Facilities with LIHTC	*45
223(a)(7) Refinance of Apartments without LIHTC	45
223(a)(7) Refinance of Apartments with LIHTC	45
223(a)(7) Refinance of Health Care Facilities without LIHTC	50
223(a)(7) Refinance of Health Care Facilities with LIHTC	45
223d Operating loss loan for Apartments	80
223d Operating loss loan for Health Care Facilities	80
241(a) Improvements/additions for Apartments/coop without LIHTC	80
241(a) Improvements/additions for Apartments/coop with LIHTC	45
241(a) Improvements/additions for Health Care Facilities without LIHTC	57
241(a) Improvements/additions for Health Care Facilities with LIHTC	45
242 Hospitals	50
Title XI—Group Practice	50
* The First Year MIP for the section 207/223(f) loans for apartments is one percent for the first year, as specified in sections 24 CFR 207.232b(a). The first year MIP for 232/223(f) health care facilities is one percent.

Credit Subsidy

A credit subsidy obligation is required for the three sections of the Act listed below. If the mortgagor's equity is produced from LIHTC for sections 221(d)(3) and 241(a), a credit subsidy obligation will not be required.

• Section 221(d)(3) for new construction or substantial rehabilitation (NC/SR).
• Section 223(d) for operating loss loans for both apartments and health care facilities.
• Section 241(a) for supplemental loans for additions or improvements for apartments only.

Dated: February 29, 2008.

Brian D. Montgomery,

Assistant Secretary for Housing, Federal Housing Commissioner.