Tap to get financing
HUD 221(d)(4) Loans
Information
Loan Facts Terms, Qualifications & GuidelinesInterest RateTerm SheetHUD Multifamily LoansStatutory LimitProcessRefinanceHUD Multifamily Construction Loans
Application
Application ProcessChecklist
Resources
HUD 221(d)(4) FAQsGlossaryMultifamily Insurance
Developers
General Contractor RequirementsDeveloper Requirements & Fees3rd Party Reports & GuidelinesAppraisal ProcessMarket StudyArchitectural and Engineering ReportsDavis Bacon WagesEnvironmental Assessments
Forms
Typical Loan TimetableDetailed Operating Statement & Underwriting AnalysisEstimate of Replacement & Construction Costs
For Brokers
About
About HUD 221(d)(4) LoanContact usLeadership
(561) 556-4747
Get financing →
Newly Published
Dec 20 at HUD 221(d)(4) Loans
What Is DSCR (Debt Service Coverage Ratio)?
Jun 14 at HUD 221(d)(4) Loans
What is Underwriting?
Jun 14 at HUD 221(d)(4) Loans
What are the Benefits of Non-Recourse Loans?
Explore the Janover Network
May 26 at HUD Loans
Construction Lender Red Flags: When to Walk Away
May 23 at HUD Loans
Top Questions to Ask Your Construction Lender Early On
May 21 at HUD Loans
How Construction Draw Processes Vary by Lender
Was This Article Helpful?
HUD 221(d)(4) Frequently Asked Questions
2 min read

Green MIP Reduction for HUD 221(d)(4) Loans

While FHA MIP is usually less expensive than the private mortgage insurance one would pay on a privately-insured loan, it can still get expensive. Fortunately, HUD is now allowing investors and developers to reduce their MIP payments to 0.25%, provided they make energy efficient improvements to their project.

In this article:
  1. Reducing MIP with Energy Efficient Housing Improvements 
  2. How to Qualify for a Reduced MIP 
  3. To learn more about how the HUD 221(d)(4) loan can help finance your multifamily development, fill in the form below and a HUD loan specialist will get in touch. 
  4. Related Questions
  5. Get Financing
Start Your Application and Unlock the Power of Choice Experience expert guidance, competitive options, and unparalleled industry expertise.
Click Here to Get Quotes →
$5.6M offered by a Bank$1.2M offered by a Bank$2M offered by an Agency$1.4M offered by a Credit UnionClick Here to Get Quotes!

Reducing MIP with Energy Efficient Housing Improvements 

While FHA MIP is usually less expensive than the private mortgage insurance one would pay on a privately-insured loan, it can still get expensive. Fortunately, HUD is now allowing investors and developers to reduce their MIP payments to 0.25%, provided they make energy efficient improvements to their project. 

How to Qualify for a Reduced MIP 

In order to be eligible for reduced MIP for new construction, the developer/owner needs to have a Energy Star Statement of Energy Design Intent (SEDI) performed and must achieve a minimum score of 75. For existing buildings, such as those that are using a HUD 221(d)(4) loan to complete a substantial rehabilitation, the developer/owner needs to achieve a Energy Star SEP (Statement of Energy Performance) of 75. To maintain the 0.25% MIP discount, the developer/owner must maintain a 75+ score over the life of the loan. In addition, buildings must be re-certified each year. Because of that, it's a good idea for buildings to have a score somewhat higher than 75. This gives them a little bit of cushion for future certifications. 

If you're interested in getting reduced MIP for your HUD multifamily development under this program, but your building doesn't quite reach a score of 75, you can hire a qualified green building professional to complete an audit and re-design your plans in order to reach the required score. 

To learn more about how the HUD 221(d)(4) loan can help finance your multifamily development, fill in the form below and a HUD loan specialist will get in touch. 

Related Questions

What is a HUD 221(d)(4) loan?

A HUD 221(d)(4) loan is a loan program that finances the construction and substantial renovation of properties with 5+ units. This can include traditional apartment buildings, mixed-use properties with a limited amount of commercial space, and even independent living projects for seniors. These loans offer leverage up to 85% of cost for market-rate developments, going even higher for affordable properties. They are fixed rate and fully amortizing for 40 years after an up to three-year, fixed-rate, interest-only period during construction. HUD 221(d)(4) debt is nonrecourse with standard carve-outs.

For more information, download our easy-to-read HUD 221(d)(4) loan term sheet.

How does the Green MIP Reduction work for HUD 221(d)(4) loans?

The Green MIP Reduction for HUD 221(d)(4) loans allows developers to reduce their MIP payments to 0.25%, provided they make energy efficient improvements to their project. To qualify for the reduction, developers must have an Energy Star Statement of Energy Design Intent (SEDI) performed and score at least 75 on it. The building must also be re-certified every 12 months to maintain the reduction. For more information, please visit www.multifamily.loans/hud-221d4-loans and hud221d4.loan/hud-221-d4-faqs/green-mip-reduction-for-hud-221d4-loans.

What are the benefits of the Green MIP Reduction for HUD 221(d)(4) loans?

The Green MIP Reduction for HUD 221(d)(4) loans offers developers the opportunity to reduce their MIP payments to 0.25%. This is a significant reduction from the typical MIP of 0.65% for market rate projects and 0.45% for Section 8 or LIHTC projects. In order to qualify for the reduction, developers must make energy efficient improvements to their project, have Energy Star Statement of Energy Design Intent (SEDI) performed, and score at least 75 on it. The building must also be re-certified every 12 months in order to maintain the green MIP reduction.

Sources: Green MIP Reduction for HUD 221(d)(4) Loans, HUD 221(d)(4) Loans

What are the eligibility requirements for the Green MIP Reduction for HUD 221(d)(4) loans?

In order to qualify for the Green MIP Reduction for HUD 221(d)(4) loans, developers must make energy efficient improvements to their project and have a Energy Star Statement of Energy Design Intent (SEDI) performed. The project must score at least 75 on the SEDI in order to qualify for the reduced MIP rate of 0.25%. The building must also be re-certified every 12 months in order to maintain the green MIP reduction.

What are the restrictions for the Green MIP Reduction for HUD 221(d)(4) loans?

The Green MIP Reduction for HUD 221(d)(4) loans requires developers to make energy efficient improvements to their project and score at least 75 on the Energy Star Statement of Energy Design Intent (SEDI). To maintain the green MIP reduction, the building must be re-certified every 12 months.

For more information, please see HUD 221(d)(4) Loans and Green MIP Reduction for HUD 221(d)(4) Loans.

How can I apply for the Green MIP Reduction for HUD 221(d)(4) loans?

You can apply for the Green MIP Reduction for HUD 221(d)(4) loans by making energy efficient improvements to your project and having an Energy Star Statement of Energy Design Intent (SEDI) performed. The project must score at least 75 on the SEDI in order to qualify for the reduction. To maintain the green MIP reduction, the building must be re-certified every 12 months.

For more information, please visit www.multifamily.loans/hud-221d4-loans and hud221d4.loan/hud-221-d4-faqs/green-mip-reduction-for-hud-221d4-loans.

In this article:
  1. Reducing MIP with Energy Efficient Housing Improvements 
  2. How to Qualify for a Reduced MIP 
  3. To learn more about how the HUD 221(d)(4) loan can help finance your multifamily development, fill in the form below and a HUD loan specialist will get in touch. 
  4. Related Questions
  5. Get Financing
Categories
  • FHA Multifamily Loans
  • HUD Multifamily Loans
Tags
  • MIP Green Reduction
  • MIP Multifamily
  • FHA MIP Reduction
  • Energy Efficient MIP Reduction
  • HUD 221(d)(4) Loan
  • HUD Multifamily Construction Loans
  • FHA 221(d)(4) Loan
  • FHA Multifamily Construction Loan

Getting commercial property financing should be easy.⁠ Now it is.

Click below for a free, no obligation quote and to learn more about your loan options.

Get financing →

Janover: Your Partner in Growth

At Janover, we offer a wide range of services tailored to your unique needs. From commercial property loans and LP management to business loans and services for lenders, we're here to help you succeed.

Learn more about Janover →
Commercial Property Loans

Get the best CRE financing on the market.

Explore Financing Options →
LP Management

Syndicate deals on autopilot with Janover Connect.

Discover LP Management →
Business Loans

Match with the right kind of loan, in record time.

Find Business Loans →
For Lenders

Supercharge your loan pipeline. Unlock more deals.

Boost Your Loan Pipeline →
HUD 221(d)(4) Loans

HUD 221(d)(4) Loans is a Janover company. Please visit some of our family of sites at: Multifamily Loans, Commercial Real Estate Loans, SBA7a Loans, HUD Loans, Janover Insurance, Janover Pro, Janover Connect, and Janover Engage.

Janover Tech Inc.

6401 Congress Ave
Ste 250
Boca Raton FL 33487
(561) 556-4747 
[email protected]

Site Information

Privacy Policy
Terms of Use


For Commercial Mortgage Brokers

This website is owned by a company that offers business advice, information and other services related to multifamily, commercial real estate, and business financing. We have no affiliation with any government agency and are not a lender. We are a technology company that uses software and experience to bring lenders and borrowers together. By using this website, you agree to our use of cookies, our Terms of Use and our Privacy Policy. We use cookies to provide you with a great experience and to help our website run effectively.

Freddie Mac® and Optigo® are registered trademarks of Freddie Mac. Fannie Mae® is a registered trademark of Fannie Mae. We are not affiliated with the Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA), Freddie Mac or Fannie Mae.

This website utilizes artificial intelligence technologies to auto-generate responses, which have limitations in accuracy and appropriateness. Users should not rely upon AI-generated content for definitive advice and instead should confirm facts or consult professionals regarding any personal, legal, financial or other matters. The website owner is not responsible for damages allegedly arising from use of this website's AI.

Copyright © 2025 Janover Tech Inc. All rights reserved.

+

Fill out the form below and get the pricing and terms banks can't compete with.