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FHA Announces Opportunity Zone Incentives for Multifamily Mortgages
The Federal Housing Administration (FHA) is offering reduced application fees for property owners applying for a multifamily mortgage to develop or renovate apartments in Opportunity Zones.
Application fees for transactions defined as “broadly affordable” will be reduced from the current $3 per thousand dollars of requested mortgage amount to $1 per thousand dollars. “Broadly affordable” is defined as developments in which at least 90% of units are Section 8-eligible, or considered affordable under the low-income housing tax credit (LIHTC) program. Meanwhile, the FHA will reduce application fees from $3 to $3 per thousand dollars for “market-rate” and “affordable” transactions.
The following FHA mortgage programs will be eligible for lower application fees within qualified O-Zones:
- New Construction and Substantial Rehabilitation: Sec. 221(d)(4)
- Urban Renewal and Concentrated Development: Sec. 220
- Purchase or Refinance of Existing Multifamily Property: Sec 223(f)
Applications must meet the following criteria for eligibility:
- They must be submitted under one of the above-mentioned programs for properties located in, or proposed for, a Qualified Opportunity Zone (QOZ), and/or
- They involve investments from a Qualified Opportunity Fund (QOF)
The FHA will designate experienced underwriters to process O-Zone applications, in an effort to ensure expert and quick reviews. The new incentives are immediately available to market-rate property applicants that have not yet submitted a pre-application. They are also now available for affordable property applicants that have not yet applied.
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