NAA/NMHC and a small coalition of industry representatives met with HUD Secretary Shaun Donovan and key HUD staff on January 5, 2011 to address significant delays in approving FHA multifamily mortgage insurance applications. FHA is taking several steps to manage its risk as a result of the historic increase in demand for loans it is experiencing.
In September, it implemented the most extensive underwriting changes in decades to its multifamily program. In addition, FHA has made changes to its loan processing procedures that are creating bottlenecks that have resulted in significant and costly delays in getting financing approved. These include creating a central loan committee, removing delegation from field offices, re-negotiating transactions and exploring additional recourse provisions as part of its new risk management oversight practices.
At the meeting, Secretary Donovan reiterated HUD’s commitment to providing liquidity and acknowledged the need for more resources to underwrite and process FHA multifamily loans given the overwhelming volume. He asked for the industry's help in getting Congressional appropriators to remove barriers that prevent HUD from reallocating funds for staff resources within the Department.
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