FHA Tax Credit Pilot Program to Speed Project Financing
On Feb. 10, the Federal Housing Administration (FHA) unveiled a new pilot program that will accelerate the approval process for the purchase or refinancing of multifamily rental properties assisted through the Low-Income Housing Tax Credit program.
The pilot program will be launched in Chicago, Detroit, Boston, and Los Angeles, and the FHA believes it will be able to cut the time needed to review and approve financing applications from about one year down to just 90 to 120 days. Expediting the review and approval process is necessary because if certain bond closings aren't met, it could result in the forfeit of credit allocations or bond reservations, and could hinder a borrower's ability to secure tax credits for future transactions.
"It has become clear that we need to rethink our process at FHA if we hope to leverage LIHTC to the maximum degree possible," said FHA's Acting Commissioner Carol Galante in a statement. "This pilot program will test our ability to significantly cut our review process so we can put people in affordable homes and provide unique financing options for developers."
For more information on the program, you can click here.