FHA Multifamily Mortgagee Letter 2024-01 — Annual Revisions to Base City High Cost Percentage and High Cost Areas; Annual Indexing of MAP Guide’s Substantial Rehabilitation and Large Loan Risk Mitigation Thresholds
HUD / FHA Multifamily · a multifamily Mortgagee Letter, amending the Multifamily Accelerated Processing (MAP) Guide, HUD 4430.G REV-3 (the 2020 MAP Guide). It does not change the Single Family Housing Policy Handbook 4000.1. Effective 2024-01-01.
FHA Multifamily Mortgagee Letter 2024-01 — Annual Revisions to Base City High Cost Percentage and High Cost Areas; Annual Indexing of MAP Guide’s Substantial Rehabilitation and Large Loan Risk Mitigation Thresholds. Full verbatim text, substring-verified against snapshot 0901fd99ce67eb69.
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Verbatim provisions from FHA Multifamily Mortgagee Letter 2024-01 — Annual Revisions to Base City High Cost Percentage and High Cost Areas; Annual Indexing of MAP Guide’s Substantial Rehabilitation and Large Loan Risk Mitigation Thresholds — each quote is a verified substring of the regulator-published source snapshot, not retyped. Quoted for reference; this is not legal advice. The operational layer (P&P updates, prompts) lives in the regulation update kits.
FHA Multifamily Mortgagee Letter 2024-01 — Annual Revisions to Base City High Cost Percentage and High Cost Areas; Annual Indexing of MAP Guide’s Substantial Rehabilitation and Large Loan Risk Mitigation Thresholds — Purpose
Maximum mortgage amounts were revised by the Consolidated Appropriations Act, 2008 (Public Law 110-161, approved December 26, 2007) (FY 2008 Appropriations Act). Section 221 of the General Provisions of Title II of Division K of the FY 2008 Appropriations Act revises the statutory exceptions to maximum mortgage amounts for the FHA Multifamily Housing Programs, listed in Section 221 of the FY 2008 Appropriations Act, by: (1) substituting 170 percent for the 140 percent exception of any geographical area, and (2) substituting 215 percent for 170 percent as the maximum exception allowed for a specific project. Accordingly, the statutory revision allows the Secretary to grant exceptions to maximum mortgage limits for certain Multifamily Housing Programs by: (1) up to 170 percent, (equivalent to a 270 percent multiplier) in geographical areas where cost levels so require or (2) up to 215 percent in High Cost Areas, (equivalent to a 315 percent multiplier) where necessary on a project-by-project basis. The law does not determine which areas are to be considered “High Cost Areas.” Accordingly, the Office of Multifamily Production has developed a list of High Cost Percentages (HCP) and High Cost Areas for 2024. The threshold for determining a High Cost Area (Special Limit Areas excepted) is a calculated, uncapped HCP that is greater than either 1) the United States average HCP, or 2) 270 percent. For the geographic areas shown in Table 1, the maximum mortgage amount may be increased by its listed HCP. For the eligible High Cost Areas (Special Limit Areas excepted), the maximum mortgage amount may be increased by up to 215 percent, (equivalent to a 315 percent multiplier), where necessary on a project-by-project basis. If only one geographic area is named in a given state, that area’s HCP is to be used for all localities within the state. If multiple geographic areas are named in a given state, the applicable HCP is the listed area closest to the project’s location. The designated Annual Base City High Cost Percentages and High Cost Areas are effective January 1, 2024, for FHA multifamily mortgage insurance Firm Commitment applications and for amendments which have not been initially endorsed.
FHA Multifamily Mortgagee Letter 2024-01 — Annual Revisions to Base City High Cost Percentage and High Cost Areas; Annual Indexing of MAP Guide’s Substantial Rehabilitation and Large Loan Risk Mitigation Thresholds — Special Limit Areas
Guam, the U.S. Virgin Islands, and the states of Alaska and Hawaii are Special Limit areas. The HCP for Special Limit Areas is 405 percent.
FHA Multifamily Mortgagee Letter 2024-01 — Annual Revisions to Base City High Cost Percentage and High Cost Areas; Annual Indexing of MAP Guide’s Substantial Rehabilitation and Large Loan Risk Mitigation Thresholds — Per Unit Limit for Substantial Rehabilitation for Calendar Year 2024
The 2016 Multifamily Accelerated Processing (MAP) Guide established a base amount of $15,000 per unit to define substantial rehabilitation for FHA insured loan programs. Section 5.1.2.A.2.b of the 2020 MAP Guide requires that this base amount be annually adjusted for inflation based on the percentage change published by the Bureau of Labor Statistics of the Department of Labor or other inflation cost index. Accordingly, the 2024 base amount per dwelling unit to determine substantial rehabilitation for FHA insured loan programs is $19,293 and was calculated using the CPI-U cost index increase of 4.9 percent as applied to the previous year’s base amount.1
FHA Multifamily Mortgagee Letter 2024-01 — Annual Revisions to Base City High Cost Percentage and High Cost Areas; Annual Indexing of MAP Guide’s Substantial Rehabilitation and Large Loan Risk Mitigation Thresholds — Large Loan Risk Mitigation Threshold for Calendar Year 2024
Mortgagee Letter 2023-14 established a base loan amount of $120 million to define the large loan risk mitigation threshold for applicable FHA insured loan programs for Calendar Year 2023. This Mortgagee Letter amended Section 3.10.1.C of the MAP Guide requiring HUD to annually review the threshold amount for an inflation adjustment, in $5 million increments, based on the percentage change published by the Bureau of Labor Statistics of the Department of Labor or other inflation cost index. Applying the CPI-U cost index increase of 4.9 percent as applied to the previous year’s base amount, the 1 HUD utilizes the same CPI measurement period as the annual updates to the Home Ownership and Equity Protection Act of 1994 (HOEPA), as published by the Consumer Financial Protection Bureau. resulting adjustment achieves the $5 million increment requirement, and thus the 2024 large loan threshold is increased to $125 million. 2 This threshold may be applied to FHA multifamily mortgage insurance applications submitted or amended on or after January 1, 2024, so long as the loan has not been initially endorsed.
FHA Multifamily Mortgagee Letter 2024-01 — Annual Revisions to Base City High Cost Percentage and High Cost Areas; Annual Indexing of MAP Guide’s Substantial Rehabilitation and Large Loan Risk Mitigation Thresholds — Table 1
TABLE 1 FHA MULTIFAMILY STATUTORY MORTGAGE PROGRAMS BASE PERCENTAGES FOR HIGH COST AREAS – EFFECTIVE JANUARY 2024 WEST REGION High Cost Percentage High Cost Area (Up to 315% Waiver Eligible) San Francisco CA – West Regional Center 270% Yes Bakersfield CA 270% Yes (2) Eureka CA 270% Yes (2) Fresno CA 270% Yes (2) Los Angeles CA 270% Yes Riverside CA 270% Yes (2) Sacramento CA 270% Yes San Diego CA 270% Yes Santa Ana CA 270% Yes (3) Anchorage AK 405% n/a – Special Limit (1) Guam 405% n/a – Special Limit (1) Phoenix AZ 270% Yes Denver CO (Satellite Office) 270% Yes Grand Junction CO 270% Yes (2) Boise ID 270% Yes Honolulu HI 405% n/a – Special Limit (1) Billings MT 270% Yes (2) Great Falls MT 270% Yes (2) Helena MT 270% Yes (3) Fargo ND 270% Yes Las Vegas NV 270% Yes Reno NV 270% Yes (2) Medford OR 270% Yes (2) Portland OR 270% Yes Rapid City SD 270% Yes (2) Sioux Falls SD 270% Yes Salt Lake City UT 270% Yes Seattle WA 270% Yes Spokane WA 270% Yes Casper WY 270% Yes Cheyenne WY 270% Yes (2) SOUTHWEST REGION High Cost Percentage High Cost Area (315% Waiver Eligible) Ft. Worth TX – Southwest Regional Center 270% Yes (3) Amarillo TX 270% Yes (2) Dallas TX 270% Yes El Paso TX 270% Yes (2) Houston TX 270% Yes Lubbock TX 270% Yes (3) San Antonio TX 270% Yes Little Rock AR 270% Yes Cedar Rapids IA 270% Yes (2) Des Moines IA 270% Yes Topeka KS 270% Yes (3) Wichita KS 270% Yes (2) New Orleans, LA 270% Yes Shreveport LA 270% Yes Kansas City MO (Satellite Office) 270% Yes St. Louis MO 270% Yes Omaha NE 270% Yes Albuquerque NM 270% Yes Santa Fe NM 270% Yes (2) Oklahoma City OK 270% Yes Tulsa OK 270% Yes (3) SOUTHEAST REGION High Cost Percentage High Cost Area (315% Waiver Eligible) Atlanta GA – Southeast Regional Center 270% Yes Savannah GA 270% Yes (2) Birmingham AL 270% Yes Mobile AL 270% Yes (2) Jacksonville FL (Satellite Office) 270% Yes Key West FL 270% Yes (3) Miami FL 270% Yes Tampa FL 270% Yes Louisville KY 270% Yes Jackson MS 270% Yes Charlotte NC 270% Yes (2) Greensboro NC 270% Yes (3) Raleigh NC 270% Yes (2) San Juan PR 270% Yes (3) Charleston SC 270% Yes (2) Columbia SC 270% Yes Knoxville TN 270% Yes (3) Memphis TN 270% Yes Nashville TN 270% Yes US Virgin Islands 405% n/a – Special Limit (1) MIDWEST REGION High Cost Percentage High Cost Area (315% Waiver Eligible) Chicago IL – Midwest Regional Center 270% Yes Springfield IL 270% Yes Fort Wayne IN 270% Yes (2) Indianapolis IN 270% Yes Detroit MI (Satellite Office) 270% Yes Grand Rapids MI 270% Yes (3) Minneapolis MN (Satellite Office) 270% Yes Duluth MN 270% Yes (2) Cincinnati OH 270% Yes Cleveland OH 270% Yes Columbus OH 270% Yes Milwaukee WI 270% Yes NORTHEAST REGION High Cost Percentage High Cost Area (315% Waiver Eligible) New York NY – Northeast Regional Office 270% Yes Albany NY 270% Yes Buffalo NY 270% Yes Rochester NY 270% Yes (2) Bridgeport CT 270% Yes (2) Hartford CT 270% Yes Washington DC 270% Yes Dover DE 270% Yes (2) Wilmington DE 270% Yes (3) Boston MA (Satellite Office) 270% Yes Springfield MA 270% Yes (2) Bangor ME 270% Yes Portland ME 270% Yes (2) Baltimore MD (Satellite Office) 270% Yes Manchester NH 270% Yes Atlantic City NJ 270% Yes (2) Camden NJ 270% Yes (3) Newark NJ 270% Yes Harrisburg PA 270% Yes (2) Philadelphia PA 270% Yes Pittsburg PA 270% Yes Providence RI 270% Yes Norfolk VA 270% Yes (2) Richmond VA 270% Yes Burlington VT 270% Yes Charleston WV 270% Yes Footnotes: 1. Special Limit Area. 2. Geographic area added in Calendar Year 2024 3. Geographic area to be eliminated in Calendar Year 2025 due to data unavailability.
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