HUD opens express lane for LIHTC construction loans

HUD opened an expedited review lane for FHA-insured construction loans on LIHTC multifamily projects, Multifamily Dive reported Nov. 3. The lane is modeled on the Section 232 express lane for senior housing healthcare facilities that the agency released in July 2025.

The HUD letter says eligible projects must carry LIHTC-restricted rents and cannot include HUD Multifamily Section 8 Project-Based rental assistance. Determining Section 8 rents does not fit an expedited review. Both 4% LIHTC transactions with tax-exempt bonds and 9% LIHTC transactions qualify. The letter also sets experience requirements for the development team, general contractor, architect and management agent. Projects with environmental risk factors requiring extensive HUD analysis are excluded.

For sponsors, the lane buys calendar time rather than leverage: loan sizing and underwriting standards are unchanged under the Multifamily Accelerated Processing Guide. Frank Cassidy, a former FHA commissioner and assistant secretary for housing who is now a senior managing director at Walker & Dunlop, said LIHTC deals are "typically low loan-to-cost deals because there's so much tax credit equity." The shortened review mainly advances closing dates on the cleanest 4% and 9% transactions, while mixed-subsidy projects stay on the standard timeline.

Cassidy said Section 232 borrowers have gotten commitments "in like two to three days." He has closed deals "in 54 business days from submission to closing, which would have typically been unheard of for HUD." Cassidy helped develop the LIHTC lane while in office and helped enact the Section 232 version.