HUD recently made updates to the following:
HUD recently revised their loan committee review thresholds. Effective August 29 for New Construction/Substantial Rehab applications, loans greater than $25 million and less than $55 million will go through Regional Loan Committee, while loans greater than $55 million will go through National Loan Committee. For Refinances, loans greater than $35 million and less than $60 million will go through Regional Loan Committee, and loans greater than $60 million will go through National Loan Committee. For HUD a7s, loans greater $75 million will go through National Loan Committee. These new changes will ideally speed up processing times for those loans under National Loan Committee thresholds.
After December 1, 2022, Multifamily housing will require consideration of reasonably foreseeable climate impacts as part of a complete environmental assessment level review along with the other Environmental Assessment factors. Depending on the climate, we might expect excessive heat, harsh winters, wildfires, flooding, power outages, and drought to be considered. Applications in the queue, however, do not need to update their environmental reviews.
For several years, HUD lenders, like Walker & Dunlop, in association with the Mortgage Bankers Association, have been pushing HUD to adjust the current bi-annual surplus cash distribution to monthly surplus cash distribution. In early September, HUD released Mortgagee Letter 2022-16 letter pertaining to Surplus Cash distributions, which permits modification of Section 13 of the Regulatory Agreement (form HUD-92466M) to allow Distributions from Surplus Cash as frequently as monthly for eligible Borrowers with the following exceptions:
HUD is implementing a temporary procedural change that permits, 1) eligible new construction or substantial rehab pre-applications to convert to firm applications while in the underwriter assignment queue, and 2) future eligible applications to submit a direct-to-firm application through March 31, 2023.
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