HUD Moves to Eliminate Green Housing Mandate
Contributed by BSM Staff

WASHINGTON -- HUD has taken the first step toward eliminating the politically motivated “Multifamily Green and Energy Efficient Mortgage” (Green MIP) category to lower costs for lenders and developers and help accelerate the supply of affordable housing stock.

At the direction of HUD Secretary Scott Turner, the Federal Housing Administration (FHA) will propose an across-the-board leveling of its Upfront Capitalized and Annual Mortgage Insurance Premiums (MIPs) to 25 basis points (.25%) for all Multifamily program categories. Some MIPs can be as high as 95 basis points.

The changes come in response to current market conditions, where a sharp rise in construction costs and mortgage interest rates since 2021 has made housing less affordable. This action should lower multifamily financing costs and help expand the supply of rental housing.

“At HUD, we’re mission-minded and focused on helping to put affordable housing within reach for hardworking Americans,” said Secretary Turner. “By leveling MIPs and cutting cost-inflating regulations, we’re unlocking competitive financing and driving down costs across the board to spur development. For too long, access to housing has been tied to obsolete, ideological mandates. Under President Trump’s leadership, Americans are no longer forced to subsidize misguided and inefficient green energy crusades at the expense of real housing solutions.”

The Multifamily Green and Energy Efficient Mortgage (Green MIP) category is burdensome and costly for lenders and developers and has proven to be ineffective in furthering wide-spread affordable housing development.

Under this notice by FHA, the Green MIP category becomes economically obsolete, because MIP rates are uniformly proposed at 25 basis points, and for all loans closed under a Green MIP rate, the requirements to evidence the initial green building achievement and the annual reporting of energy performance would be fully eliminated.

This move is part of implementing Presidential Action to Deliver Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis, and President Trump’s Executive Order on Unleashing American Energy.

HUD will solicit comments from the public for 30 days.

For more, go to hud.gov.