“Raising the deductible amount provides important flexibility for lenders and property owners to obtain and maintain appropriate property insurance that covers their properties in the event of catastrophic weather damage while maintaining appropriate safeguards to ensure that properties are adequately insured,” said Ethan Handelman, deputy assistant secretary for multifamily housing at HUD.
The previous policy prohibited this deductible from exceeding the greater of $50,000 or 1% of the insurable value for any insured building, with a maximum of $250,000.
“Not only is it required by FHA, but being able to secure property insurance coverage is critical to developing new and maintaining existing affordable and market-rate multifamily rental housing,” Handelman added.
Bob Broeksmit, president and CEO of the Mortgage Bankers Association (MBA), welcomed the change, noting that it would help reduce financing costs and make it easier for borrowers to secure adequate coverage.
“Multifamily property insurance availability and affordability is becoming a significant hurdle to increasing rental housing supply, and we have advocated strongly for reforms to the FHA-insured multifamily program to meet the urgent need for affordable housing,” he said in a statement.
Source: mpamag.com