The U.S. Department of Housing and Urban Development (HUD) on March 16 announced that the cost of land will no longer be included in the calculation of per-unit mortgage loan limits for FHA-insured developments. This new interpretation of statute will substantially increase the amount of loan proceeds apartment firms can obtain with FHA loans.
In a notice, the Department says that although land costs have traditionally been included in those calculations, the statute does not require it and this “inadvertently prevented the development of needed housing in areas where the cost of land suitable for multifamily development is very high.”
The ruling applies to the 221(d)(4) and 223(f) and other programs listed in the notice. Learn more here.