This week, HUD released designations for Annual Base City High Cost Percentages and High Cost Areas for maximum mortgage amounts for the FHA Multifamily Housing Programs. In addition, the Multifamily Accelerated Processing (MAP) Guide adjusted the base amount per unit to define substantial rehabilitation for FHA insured loan programs.
Annual Revisions to Base City High Cost Percentage, High Cost Area
The Office of Multifamily Production has developed a list of High Cost Areas for 2017. The threshold for a High Cost Area has been set for all areas with a “calculated” High Cost Percentage (HCP) of 287.23 or greater. The following list is effective January 1, 2017 for FHA multifamily mortgage insurance Firm Commitment applications, for amendments which have not been initially endorsed, and for new geographical areas established within the list:
**The area multiplier is to be used for all locations in the state if only one city has been named in that state; if multiple cities are named in any state, the multiplier for the city closest to the location named in the Mortgagee Letter is to be used. Guam, the U.S. Virgin Islands, and the states of Alaska and Hawaii are Special Limit areas for which the HCP is 405%.**
Per Unit Limit for Substantial Rehabilitation for Calendar Year 2017
The 2016 MAP Guide established a base amount of $15,000 per unit to define substantial rehabilitation for FHA insured loan programs. The MAP Guide requires that this base amount be adjusted periodically based on inflation cost index changes. Accordingly, the 2017 base amount per dwelling unit to determine substantial rehabilitation for FHA insured loan programs is $15,315.
To view the notice, please click here.