Investors, property owners, and developers that are involved in affordable housing were doubtless glad to hear of the Department of Housing and Urban Development’s changes in underwriting requirements — specifically, debt service coverage ratios (DSCR) and loan-to-value or loan-to-cost (LTV/LTC) ratios.
Under the Multifamily Accelerated Processing Guide, “maximum loan amounts are the lesser of: a) the requested mortgage amount, b) the amount allowed by statutory limits, c) the amount supportable by applicable debt service coverage ratios, or d) the amount supportable by the applicable loan ratios.”
According to estimates by the National Low Income Housing Coalition, there’s a U.S. shortage of 7.3 million affordable rental homes. HUD explained that the changes in underwriting policies were intended to boost the housing supply.
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