FHA Pilot Program Begins in Balt./Fort Worth 

NAA/NMHC continue to meet with HUD to seek ways to clear its backlog of multifamily mortgage insurance applications. In late July, Acting FHA Commissioner Carole Galante hosted NAA/NMHC and a group of lenders, developers and apartment owners at HUD’s field house in Baltimore to demonstrate an FHA pilot program designed to expedite its multifamily underwriting process.

The pilot program is currently operating in Baltimore and Fort Worth, Texas, and soon will be rolled out to offices with the largest application pipelines. Based on recommendations by a consulting firm engaged by HUD, the program involves an internal overhaul in application processing with great focus on pre-application and early application review and underwriting. The changes will not change the information required from borrowers.

While the changes should result in improvements, HUD acknowledges that the full impact won’t be seen across the system until later next year when the rollout is complete. It is unclear whether the changes will improve the backlog, although they should yield better management of the overall pipeline and allow HUD to review its current field office/HUB office approval delegation, which has been severely curtailed over the past 18 months.

NAA/NMHC will continue to press HUD to raise the threshold for requiring a loan to go through its central loan committee. Currently, loans exceeding $15 million or for projects with 150 or more units must get central loan committee approval. HUD officials acknowledged that the central loan committee is becoming more efficient, more approvals are being done via electronic review and the rejection level is less than 10 percent and declining.

NAA/NMHC also will continue to urge HUD to not only improve the process for future loan applications but to more aggressively deal with the backlog of existing applications.

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