1. MidWest Lenders Conference September 27, 2017
MF Production Update
Dan Sullivan Acting Director Multifamily Production

2. Agenda People Pipeline Production numbers Probability of success
Program trends
Production issues
Problems

3. People Secretary Carson Deputy Secretary Patenaude FHA Commissioner
MF Deputy Assistant Secretary
Directors – OFSO, OAMPO, Recap, PMSO
MACOD
Director, MF Production
Technical Support Division
Program Admin Division

4. People in Production
Acting Director, Office of Production: Daniel Sullivan
Program Administration Division Director, Donald Billingsley,
Technical Support Division Director, Tom Bernaciak,
Tax Credit Program Manager, Liz Arteaga,
Front Office Assistant, Rita Simmons,
+ 9 other staff working hard.

5. Average Loan Size ($millions) Oct16/August17
Pipeline snapshot # of applications in pipeline (Preapps and Firms received not rejected withdrawn, or closed as of 9/13/17)
Program
October 2016
September
2017
Average Loan Size ($millions) Oct16/August17
New Constr/Sub Rehab – Firms, Preapps
240
273
$21.7/$25.7
223(f)
266
276
$11.3/$14.0
223(a)(7) 89 35
$14.7/$11.6

6. Firms Issued and Reissued
Basic FHA Firm Commitments # of applications and volume FY16 – vs - Annualized FY17 (as of 9/13/17)
Firms Issued and Reissued
FY2016
FY2017
annualized
% Change vs 2016
# of Apps.
835
1,015
+ 22%
Mortgage volume ($MM)
$10,813.9
$15,586.0
+ 44%

7. MF Endorsements – 2016 vs 2017 2016 2017 % change # of Loans 882 1,018
(annualized)
% change
# of Loans
882
1,018
+15%
Mortgage Volume
($ Billions)
$10.8
$14.2
+ 31%

8. Multifamily Endorsements by Program
Section of the Act
Initial Endorsements YTD Fiscal Year 2017, annualized from 8/23/17
Dollars (millions)
Percentage of $ volume
# of Mortgages
New Construction / Sub Rehab Program
$4,014.7
28%
189
223(f) 223(a)(7), and 241(a)
$9,453.6
66%
742
Risk Share
$766.1 5% 87
Totals
$14, 234.3
100%
1,018

9. Application Decisions FY17 YTD (8.22.17)
a7s and f's – 747 decisions
92% approved (4% reject, 4% withdrawn)
range of approved mortgage amounts:
min
median
max
$480,800
$9,056,000
$191,335,800
# greater than $75 million: 3
Preapp NC/SR decisions
45% approved, (51% reject, 4% withdrawn)
$4,262,900
$28,848,100
$68,837,300
Firms NC/SR decisions
90% approved (7% reject, 3% withdrawn)
$1,020,000
$18,704,200
$101,528,500 2

10. “Hit Ratio” % of applications received which are approved – based on final decisions made
Stage of Processing
% approved
Oct 2012 – June 2013
Q3-Q4 of FY16
# of Decisions
FY17 through 8/22/17
Refinancing - FIRM
75%
95%
747
92%
NewC/Sub Rehab
PREAPP
48%
54%
296
45%
FIRM
78%
93%
213
90%

11. % of Firms within DAS Timeframes
Program type
Standard for # of calendar days HUD processing (net of prelim. Rejects)
Percent
within goal FY16
within goal FY17 – YTD as of 8/23/17
New Construction / Sub Rehab
60 days (at each stage)
87%
91%
Section 223(f) 45
74%
85%
Section 223(a)(7) 30
81%
84%

12. Basic MF FHA - LIHTC production Initial Endorsements FY 2017 – Annualized as of 8/23/17
Section of the Act
# of FHA loans with Tax Credits
% of closings using Tax Credits
(by # of loans)
Volume of FHA loans with Tax Credits
($ millions)
New Construction / Sub Rehab Program 82
44%
$959
223(f) 223(a)(7), and 241(a)
183
24%
$1,689.2
Total
265
28%
$2,648.2

13. # of Basic FHA loan closings Green (market and affordable)
Basic MF FHA – Green, Affordable, Broadly Affordable, and Market production Initial Endorsements FY 2017 –as of 8/17/17
Section of the Act
# of Basic FHA loan closings
Market
Broadly Affordable
Affordable
Green (market and affordable)
New Construction / Sub Rehab Program
150 24 51 19 56
223(f) 223(a)(7), and 241(a)
614
224
244 99 47
Total
764
248
295
118
103
100%
32%
39%
15%
14%

14. HUD’s MF Production Issues – Governance
Workload/ pipeline management
Consistency - Single Underwriter Model
Training
Construction Loan Administration, Closing coordinators - Standard Work
Non-Critical Repair Escrow Administration

15. HUD Internal Loan Approval Thresholds effective 9/1/17

16. HUD’s MF Production – Programmatic issues
Tax Credit Pilot (new construction/sub rehab)
223(f) – boundaries around repairs / construction
MIP – Green, affordable, corrections
Risk Share / FFB
MAP Guide

17. Mortgage Credit - credit analysis, processing
- Who is a principal?
- Partnership / Org doc arrangements
around terms of equity (or is it debt??)
- Disclosure
- Non-US investors – OFAC, disclosure
- Experience

18. HUD’s MF Production – Technical issues
Davis Bacon
Env. Issues - Noise, Water, other
Markets - “inflection point”, “supply”

19. Processing –vs- Underwriting Concentrated Risk underwriting
Lender Partner Issues
Processing –vs- Underwriting
Concentrated Risk underwriting
Too big to fail?
Disclosure?
Identities of Interest

20. Questions