What HUD's 0.25% MIP means if you already have a HUD loan

Since October 1, 2025, HUD charges 0.25% a year plus 0.25% up front for mortgage insurance on new FHA multifamily housing loans, down from 0.50% to 0.95% a year (90 FR 45789, September 23, 2025). Loans already insured keep their premium. To get the new rate, an owner has to refinance.

What the old rates were

Under the schedule HUD set in 2016 and replaced in 2025, the annual premiums were:

Program	Annual before	Upfront before	Annual and upfront now
221(d)(4) new construction or substantial rehab	0.65%	0.65%	0.25% / 0.25%
223(f) purchase or refinance	0.60%	1.00%	0.25% / 0.25%
223(a)(7) refinance	0.50%	0.50%	0.25% / 0.25%
241(a) supplemental	0.95%	0.95%	0.25% / 0.25%
220 urban renewal, 231 elderly, 213 co-op	0.70%	0.70%	0.25% / 0.25%

Loans that qualified for HUD’s green, broadly affordable or affordable categories already paid 0.25% or 0.35%; the notice eliminated those categories. Risk-sharing loans under Sections 542(b) and 542(c) are charged 0.25% multiplied by FHA’s share of the risk, so a 50% risk-share loan pays 0.125%.

What it’s worth

MIP is charged on the outstanding balance. On a $15 million 223(f) loan insured at 0.60%, the premium is about $90,000 in the first year. At 0.25% it would be about $37,500. That is $52,500 a year of lower premium even if the note rate doesn’t move. Against it sit the 0.25% upfront premium, lender and HUD fees, third-party costs and any prepayment premium in the old note. The net depends on those.

The math gets better when rates help too, and worse when they don’t. A loan at 3.25% that refinances at 5.5% to save 0.35% of MIP is a bad trade. Our 223(a)(7) estimator puts the rate, the MIP, the term and the costs on one screen, and every property page links to it with that loan’s numbers filled in.

Who should look first

• Owners of loans endorsed from 2023 to September 2025 with rates in the 5s and 6s and a 0.60% or 0.65% premium. They have the most to gain on premium, and may also get a lower rate, depending on the market when they refinance.
• Owners who want to extend the term. A 223(a)(7) can run up to 12 years past the current maturity, capped at the original program’s longest term.
• Anyone already planning a refinance for other reasons. The cheaper premium changes the break-even.

The fine print

The notice applies to applications “submitted or amended on or after October 1, 2025, so long as the loan has not been initially endorsed.” A 223(a)(7) is a new insured loan, so it is priced under the new schedule. Risk-sharing and coinsured loans can’t use a 223(a)(7) at all (MAP Guide 3.8.1), so they’d need a full 223(f) to get there.

Sources

• 90 FR 45789, “Changes in Mortgage Insurance Premiums Applicable to FHA Multifamily Insurance Programs,” September 23, 2025 (FR Doc 2025-18379).
• HUD Multifamily Accelerated Processing (MAP) Guide, 2020 edition as revised March 2021, sections 3.8 and 18.