HUD WITHDRAWS PROPOSAL TO INCREASE MIPs
The U.S. Department of Housing and Urban Development (HUD) today announced the withdrawal of its proposal to increase multifamily mortgage insurance premiums (MIPs) for fiscal year 2007. HUD issued a notice on June 28, 2006 that proposed changes in the MIPs for Federal Housing Administration (FHA) multifamily mortgage insurance programs whose commitments will be issued or reissued in FY 2007, with the exception of those that included low-income housing tax credits (LIHTCs). According to this notice to be published next week in the Federal Register, approximately 359 comments were received, and the comments, including a letter signed by 121 members of the U.S. House of Representatives and 26 Senators, were overwhelmingly opposed to the MIP increases. Based on consideration of the concerns raised in the comments, HUD decided not to proceed with implementation of the MIP increases for FY 2007 at this time. Instead, the FY 2006 MIPs, issued on August 30, 2005, will remain in effect. For all sections of the National Housing Act where the mortgagor equity is produced from the proceeds of the sale of LIHTCs, the MIP will remain at 45 basis points.