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Federal Housing Administration Increases Threshold Amount From $75 Million To $120 Million

The modification enables lenders to enjoy enhanced flexibility in underwriting Multifamily transactions, extending up to $120 million.

August 3, 2023

Washington- A mortgagee letter was published by the Federal Housing Administration (FHA) to increase the threshold of a multifamily loan from $75 Million to $120 Million. The threshold for FHA Multifamily insurance has been raised for the first time since 2014. This increase allows a larger number of transactions to utilize standard underwriting processes when applying for FHA Multifamily insurance. FHA will be reviewing the threshold annually with the intention of increasing $5 Million if the need arises. The main reason for these changes is to simplify underwriting for multifamily housing development and provide regular adjustments.

Assistant Secretary Julia Gordon said, “We know that borrowers are contending with the dual challenges of increased development costs and meeting the nation’s dire need for more rental housing. Anything we can do to prudently alleviate extra steps in obtaining FHA insurance will help all of us meet the housing supply challenges before us.”

Deputy Assistant Secretary Ethan Handelman believes that revising the threshold is an important step for the industry. This way, the stakeholders will rely on FHA-insured financing for a variety of multifamily transactions, and that too without any barriers.

FHA’s Multifamily accelerated processing (MAP) guide contains additional requirements for underwriting loans that often exceed the threshold for large loans. The additional requirements are not applicable to the loans below the threshold amount. The mortgagee letter published today includes the revisions to the MAP guide to reflect the new threshold. The other requirements of FHA remain the same.

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The content provided in this article draws inspiration and includes quotes from various reputable sources, including news articles, government data, and interviews. Affordable Housing 411 strives to ensure accuracy and credibility, but the information presented may be based on some external sources. We encourage readers to refer to the referenced materials for more in-depth insights and verification.

Department of Housing and Urban Development. “Federal Housing Administration Increases Dollar Amount Threshold for Large Multifamily Loans to Be Eligible for Standard Underwriting”. HUD, June 28, 2023,
Federal Housing Administration Increases Dollar Amount Threshold for Large Multifamily Loans to Be Eligible for Standard Underwriting | / U.S. Department of Housing and Urban Development (HUD)

Last Updated: September 20, 2021