A.3.8.3 Affordable Housing

A. Annual MIP for this category is 35 basis points for all multifamily FHA-insured loan types. To qualify, the property must provide a set-aside of affordable units that meets one of the definitions below, and agree to accept voucher holders.

1. Inclusionary Zoning, Density Bonus Set-asides, and Other Local Affordability Restrictions: Property owners shall submit with the FHA mortgage insurance application evidence of a deed covenant or housing ordinance on “inclusionary zoning” at the subject property to evidence the requirement for affordable unit set-asides. A minimum of 10 percent of the units must be affordable to, at most, a family at 80 percent AMI, with rents sized to be affordable at 30 percent of the income at that level. The affordability set-aside must be on site, in effect for at least 30 years after final endorsement of the FHA-insured mortgage, be monitored by public authority, be recorded in a regulatory agreement addressing both the affordability requirements and on-going public authority monitoring, and must be approved by the locality consistent with the specific zoning or local ordinances enacted to require or support affordable multifamily housing.

For an owner to meet the public authority monitoring requirement, the owner should negotiate the monitoring capability with the local Housing Authority and/or the local municipality that administers the affordability restriction. This agency must provide the owner with formal written documentation describing its agreement to monitor the property, which is then included in the recorded regulatory agreement. A description of this arrangement must be provided in the Underwriter Narrative.

2. Project has between 10 percent and 90 percent of units covered by a Section 8 PBRA contract or other state or federal rental assistance program contract serving very low-income residents, with a remaining term of at least 15 years.

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Appendix 3 Program Specifications and Limitations A.3.8 Affordable & Green MIP Rate Categories

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3. Project has between 10 percent and 90 percent of units covered by an affordability use restriction under the Low Income Housing Tax Credit program or similar state or locally sponsored program, with rents sized at no greater than 30 percent of the income eligible for occupancy under the Low Income Housing Tax Credit program, with a recorded regulatory agreement in effect for at least 15 years after final endorsement and monitored by a public entity.

B. Any project that is neither subject to a LIHTC affordability restriction nor a Section 8 HAP Contract but is subject to another federally-based affordable use agreement must meet or exceed the LIHTC affordability requirements for not less than 10% up to 90% of the units.

C. The project owner must also agree to accept voucher holders under the Section 8 Housing Choice Voucher program or other federal program voucher holders as residents for vacancies in units not covered by project-based Section 8.

D. There is no affordable rent advantage evidence required, and Lender fees are not constrained by this category’s requirements.