The program was included in the Housing and Economic Recovery Act of 2008. Its goal is to streamline FHA mortgage insurance applications for projects with equity from the Low Income Housing Tax Credit Program. To that end, HUD has created a distinct application form and processing track under the section 223 (f) program.

The pilot program will be available for permanent financing for recently constructed and occupied properties, preservation and moderate rehab for Section 8 rental assistance properties, or older stabilized properties through the re-syndication of tax credits. Features of the pilot include:

• the possibility of not being subject to Davis-Bacon wage rates;
• in-place rehab, not exceeding $40,000 per unit in hard costs, and no more than 2 weeks temporary relocation;
• may have either 4% LIHTC with tax exempt bonds or 9% LIHTC;
• 90% or more of the units must have low income occupancy and rent restrictions as required by the Section 42 guidelines;
• maximum loan of $25 million; and,
• targets of firm commitment issuance within 60–90 days of application submission and a closing within 90–120 days.

Centerline will be authorized to begin submitting loans under the program in early 2013. The company envisions the program having a dramatic impact on HUD's brand. “This program could really be a game-changer for HUD in the affordable housing market,” says Melton.

Several other lenders were tapped by HUD in late November to take part in the program. They include Alliant Capital, LLC; AmeriSphere Mortgage Finance, LLC; Arbor Commercial Mortgage, LLC; Berkeley Point Capital LLC; Centennial Mortage, Inc.; Dougherty Mortgage LLC; First Housing; Grandbridge Real Estate Capital LLC; Huntoon Hastings, Inc.; Mason Joseph Company, Inc. and Tavernier Capital Funding, LLC.

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