HUD's Proposed MIP Overhaul Could Reshape Multifamily Lending in 2025

FHA MIP Proposal: What Developers and Lenders Need to Know

HUD has announced a proposal that would standardize the mortgage insurance premium (MIP) for FHA multifamily loans to a flat 25 basis points—regardless of energy certification status. If approved, this would mark a decisive shift away from the tiered “Green MIP” structure, eliminating the need for developers to pursue LEED, Energy Star, or other qualifying programs just to receive reduced premiums.

The benefits are clear:

• Faster loan processing

• Simplified underwriting

• Greater predictability in deal structuring

• A more level playing field for developers of all sizes

This change could unlock significant time and cost savings—particularly in affordable housing markets where even a 5–10 bps swing can impact viability.

We’re still in the 30-day comment period, but if finalized, this would apply to all new applications moving forward.

Need help modeling your pipeline under the new structure? Let’s connect and map it out.