Why Borrowers Overlook HUD at Their Own Peril

Approximately $875 billion in commercial and multifamily mortgage debt is maturing this year, much of it floating-rate bridge loans originated during the 2021-2022 low-rate environment. Many of those loans are now refinancing into permanent debt markets where rates sit materially higher, creating refinancing challenges.

Against that backdrop, HUD has repositioned itself – making its multifamily programs notably cheaper, more generous on proceeds and easier to execute as it competes for market-rate business lost to agency and conventional lenders.

Q1 2026 production numbers for HUD multifamily compared to the agencies demonstrate the growth in HUD products amongst multifamily borrowers. HUD multifamily production is up over 70% year-over-year – versus Fannie Mae and Freddie Mac at 45% and 30%, respectively.

In October, HUD reduced mortgage insurance premiums (MIPs) to the statutory minimum of 25 basis points across all FHA multifamily programs – down from 60 to 95 basis points for market-rate deals. That single change eliminated a key disadvantage versus the agencies and brought HUD's all-in cost firmly into competitive territory.

Streamlined for Competition

Just as importantly, HUD simplified its structure. The elimination of tiered MIPs also removed the "green" category and its associated operational and compliance burdens, allowing market-rate borrowers to access lower pricing without added reporting or operational requirements.

Proceeds have increased as well. In January 2025, HUD lowered its market-rate DSCR requirement from 1.176x to 1.15x and increased maximum leverage to 87%. Combined with 35-year fully amortizing terms, HUD now often delivers higher proceeds than agency executions, which typically underwrite at 1.25x DSCR with shorter terms and amortization schedules.

Execution – long the program's biggest drawback – is improving too.

As of May 4, HUD streamlined or simplified several environmental review requirements that historically delayed or even disqualified deals, including restrictions tied to railroad vibration, pipeline setbacks, high-voltage power lines, and outdoor noise thresholds. In one recent deal, a property that previously failed under environmental standards was able to proceed under the updated guidelines.

Processing timelines are also moving in the right direction. HUD is still not as fast as an agency closing, but it's no longer the bottleneck borrowers remember.

For borrowers navigating today's refinancing wave, FHA-insured lending is no longer a niche option – it's a competitive one. And those who continue to overlook it may be leaving meaningful proceeds and pricing advantages on the table.

Erik Lindenauer serves as President of Healthcare and FHA Lending at NewPoint, responsible for overseeing the firm's FHA lending program as well as the company's integrated healthcare debt and sales platform. Mr. Lindenauer joined NewPoint following its merger with HHC Finance in 2021. Previously, he served as Executive Chairman of HHC Finance, a leading HUD lender consistently ranked among the nation's top healthcare financing providers.

With more than 30 years of experience in mortgage and investment banking, Mr. Lindenauer has specialized in healthcare lending, multifamily debt, and FHA- and FNMA-insured financing. Over the course of his career, he has originated and underwritten more than $2 billion in mortgage loans, with a focus on acute care hospitals, assisted living facilities, senior housing, and skilled nursing facilities.

Before founding HHC Finance in 2008, Mr. Lindenauer was a Managing Director at CapitalSource and held leadership roles at a New York-based investment banking and mortgage banking firm specializing in conventional and government-assisted loans. He has also provided consulting services to newly established FHA mortgage companies, authored articles for industry publications, and spoken at numerous healthcare finance conferences.

He is a graduate of Hampshire College in Amherst, Massachusetts.

Michael Gehl serves as Head of Healthcare and FHA Operations, where he is responsible for reviewing and structuring all FHA/HUD healthcare loan applications and serves on NewPoint's FHA loan committee.

Prior to joining NewPoint, Mr. Gehl held a similar role as Chief Investment Officer at HHC Finance before its acquisition by the firm. Earlier in his career, Mr. Gehl was a Vice President at Credit Suisse in the Investment Banking division's fixed income group. There, he focused on healthcare real estate lending, with responsibilities including underwriting property cash flows, analyzing loan profitability, preparing credit committee and rating agency presentations, reviewing loan documentation and prospectuses, and supporting investor roadshows. His experience includes work on several landmark healthcare transactions, including three of the largest skilled nursing real estate deals in history: Manor Care, Mariner Healthcare, and Beverly Enterprises. Mr. Gehl began his career as an investment banker in the consumer products and retail group at Salomon Smith Barney.

Mr. Gehl holds a Bachelor of Business Administration in Finance from the University of Michigan.

David Lundin is Chief Underwriter of FHA Lending at NewPoint, where he leads underwriting and processing initiatives for the firm's HUD/FHA platform.

Mr. Lundin brings more than 30 years of experience in the HUD lending sector. Prior to joining NewPoint, he served as Chief Underwriter for Affordable Housing at KeyBank. Earlier in his career, he held roles as Chief Underwriter, FHA at Berkley Point Capital, Founder and Managing Member of Hampden Park Capital, and Senior Vice President and HUD Regional Manager at CWCapital.

Mr. Lundin holds a Bachelor of Arts from Assumption College. He is a HUD-approved MAP and LEAN underwriter for the agency's multifamily and healthcare programs, respectively.