Legislation to Raise FHA Multifamily Income Limits
May 6, 2025
Two freshmen senators unveiled a bipartisan bill last week that would raise the loan limit caps for Federal Housing Administration (FHA) multifamily loans administered by the Department of Housing and Urban Development (HUD).
Click here for the legislative text.
Why it matters: FHA multifamily programs insure loans for construction, rehabilitation, repair, refinancing, and purchase of multifamily rental housing properties.
- Senator Ruben Gallego (D-AZ) and Senator Dave McCormick (R-PA) introduced the legislation.
- If enacted, the bill would raise the base FHA multifamily unit income limits that determine eligibility. Those income limits have not been updated since 2004, though they have been subject to annual inflation adjustments and high cost-of-living multipliers.
By the numbers: The bill would raise the base income thresholds and adjust the index for inflation:
- The inflationary adjustment index would change from the Consumer Price Index (CPI) to the Price Deflator Index of Multifamily Residential Units Under Construction (published by the Census Bureau).
- Statutory threshold changes would impact the following HUD programs:
- Section 207 – Multifamily Housing Insurance
- Section 213 – Cooperative Housing
- Section 220 – Urban Renewal Housing
- Section 221 – Low- and Moderate-Income Rental and Cooperative Housing;
- Section 231 – Housing for Elderly Persons
- Section 234 – Blanket Mortgage Insurance for Condos
What’s next: Republicans and Democrats continue to be interested in lowering the cost of housing, both single-family and multifamily.
- If lawmakers find enough areas of bipartisan agreement, a larger housing-focused bill could move through Congress in the next year and a half.
- However, methods lowering the costs of housing through subsidies, direct assistance, or supply incentives can provoke sharp disagreements.
- While there are plenty of areas of bipartisan opportunity, the enactment of any housing policy, on a standalone basis or as a larger bill, will be challenging.
Contact David McCarthy (dmccarthy@crefc.org) with any questions.