On Monday August 22, 2011, the Federal Housing Administration (FHA) issued an updated version of its Multifamily Accelerated Processing (MAP) Guide. The was updated in response to a significant increase in demand for FHA insured multifamily development loans for the current fiscal year. This year alone, the FHA has insured almost 1,100 loans nearing $10.5 billion, which is about seven times greater than the demand for FHA insured loans from three years ago. In order to meet this new demand, the new guide will help expedite and better manage the processing of new loan applications.
Included in the revised MAP guidelines are updated market study analysis requirements, in which the National Council of Affordable Housing Market Analysts (NCAHMA) provided extensive guidance. The stated purpose of these new market study requirements is to assure there is adequate and sustainable market demand for additional affordable units. Much of the guidance that NCAHMA provided is evident in the MAPs guidelines for content and format.
The MAP Guidebook states that going forward market analyses should include an executive summary; a detailed description of the proposed project that includes number of units, proposed market rents, proposed amenities and services, and description of income or rent restrictions; a Housing Market Area (HMA) Analysis including detailed descriptions of location, geographic characteristics, and an in-depth analysis of the nearby competitive housing; descriptions of demographic, economic and employment characteristics of the HMA; analysis of current housing market conditions within HMA including discussion of rental and for-sale markets; characteristics of rental units in the pipeline, under construction and in planning; and an estimate of future demand for the specified forecast period. The updated MAP Guidebook also includes specific requirements for projects specifically designed for elderly residents, income restricted projects, and projects that will utilize public financing such as Low Income Housing Tax Credits (LIHTC).
In addition to new content standards for market studies, the MAP also includes specific market analyst qualifications. In order to be qualified to perform market analyses, market analysts must possess at least 3 years of experience in market analysis for income producing properties, have recent experience in market analysis for multifamily properties, be knowledgeable about market conditions and financing trends in the specific geographic market of project, and be experienced in conducting market studies for projects of similar complexity and characteristics. In addition, if the project includes commercial space, LIHTC or other subsidies, the market analyst must have comparable prior experience.
The effective date for pre-applications must be within 120 days before the date of the pre-application package. For Firm Commitments, the effective date of the study must be within 180 days prior to the issuance, re-issuance or amendment of the Firm Commitment. Expired reports must be updated as needed by re-surveying all relevant data.