FHA program terms moved substantially between January 2025 and May 2026. Most published material — including term sheets from major lenders and the reference sites that rank highest for these searches — has not fully caught up. Undated PDFs are the norm in this industry, which makes a document's vintage hard to establish and easy to misjudge.
Below is a checklist. If a document you are relying on contains anything in the left column, it predates a change and its other figures deserve the same scrutiny.
The five changes
| If it says… | Current | Changed by |
|---|---|---|
| 223(f) MIP of 1% upfront / 0.60% annual | 0.25% / 0.25% | FR-6522-N-02, Sept. 23, 2025 |
| Green MIP discount of 25 bp available | Eliminated | Same notice; Aug. 25, 2025 for 232 |
| Broadly Affordable or Inclusionary-Voucher MIP tiers | Eliminated | Same notice |
| 223(f) market rate at 85% LTV / 1.176x | 87% / 1.15x | ML 2025-03, Jan. 8, 2025 |
| 223(f) affordable at 87% / 1.15x | 90% / 1.11x | ML 2025-03 |
| Repair threshold of $15,000 per unit (or $15,536) | $20,406 base for 2026 | ML 2026-05, May 20, 2026 |
| Large loan threshold of $120M or $125M | $130M | Indexed; 2025–2026 |
| “Property must be at least three years old” | Superseded — 1.17x for 3 months | ML 20-03, Mar. 2, 2020 |
| 232 MIP of 0.25% / 0.25% | 100 / 65 bp for 232/223(f) | 232 excluded from the 2025 cut |
| 232 refinance at 85% / 90% LTV | 80% / 85% | Handbook 4232.1, Ch. 3 |
| 232 equity take-out “may be available” | Prohibited | Handbook 4232.1, §3.13 |
The two errors that run in opposite directions
There is a symmetry worth noticing. On the multifamily side, the common error is understating borrower benefit — quoting the old MIP and the old leverage, which makes FHA look worse than it is and sometimes steers a borrower to agency debt on bad numbers.
On the healthcare side, the common error is overstating it — applying the multifamily MIP cut to Section 232, publishing 85%/90% leverage instead of 80%/85%, and suggesting cash-out is possible when it is prohibited. That direction is worse, because it produces a transaction that cannot be done after the application fee has been spent.
The most consequential single error in the field is the suggestion that Section 232 permits equity take-out. We have found it on prominent reference pages, and reinforced on at least one lender term sheet that presents debt-seasoning LTV bands as though they were cash-out tiers. A healthcare owner who builds a liquidity plan on that will reach the end of a months-long process with nothing. See Section 232 forbids cash-out.
How to date an undated document
Few lender term sheets carry an “as of” date. Three ways to estimate:
- The MIP line. The single most reliable tell. 1%/0.60% on a 223(f) means pre-October 2025. 25/25 on a 232 deal means the author applied the wrong notice.
- The DSCR and LTV. 1.176x or 85% means pre-January 2025.
- The filename or footer code. Many are versioned rather than dated — a trailing code like
0325orV022526often encodes a month and year. It is an inference, not a date, but it is usually the only signal available.
Three questions for any advisor
- “What is the annual MIP on this program, and which notice sets it?” A current advisor names the rate and can point to the Federal Register notice. If the program is 232 and the answer is 25 basis points, stop.
- “What DSCR applies if the property got its certificate of occupancy fourteen months ago?” Current answer: 1.17x for three consecutive months on a market-rate deal, with a 50% cash-out holdback. “It has to be three years old” means pre-2020 material.
- “What is the substantial rehabilitation threshold for this property's market this year?” A current answer starts from $20,406 and applies the high-cost percentage. An answer of $15,000 is a decade old.
A word on our own currency
Everything on this site carries a review date, and every program figure cites the mortgagee letter, Federal Register notice or handbook section that sets it. We re-verify against HUD's numbered mortgagee letter list, the Federal Register and the drafting table on a recurring schedule, and where a provision is a draft rather than operative guidance we say so. Figures stated as current here are current as of the date in the page header — and if you find something on this site that has gone stale, we would like to know.
Primary sources for this article
- FR-6522-N-02, 90 FR 45789 (Sept. 23, 2025)
- Mortgagee Letter 2025-03 (Jan. 8, 2025)
- Mortgagee Letter 2026-05 (May 20, 2026)
- Mortgagee Letter 20-03 (Mar. 2, 2020)
- Section 232 Handbook 4232.1, Section II Chapter 3
Figures stated as current are current as of October 13, 2026. HUD revises mortgagee letters and handbooks frequently; where a provision is a draft rather than operative guidance we say so on the page. This is general information, not legal, tax or financial advice, and not a commitment to lend.
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