U.S. Department of Housing and Urban Development (HUD) Secretary Scott Turner recently announced 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 for all Multifamily program categories.

This action is the first step in eliminating what HUD called the “ideologically motivated” green energy category, which it expects will lower costs for lenders and developers and will help accelerate the supply of affordable housing stock.

HUD will solicit comments from the public for 30 days.

“At HUD, we’re mission-minded and focused on helping to put affordable housing within reach for hardworking Americans,” Turner said in a release. “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, HUD stated.

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.