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

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.