HUD’s New Approach to Fair Housing Accessibility Claims
Multifamily owners face Fair Housing risk throughout a property’s life, from design and construction to leasing and operations. Fair Housing design and construction claims can be particularly difficult and costly to address, especially when they involve conditions created years earlier or by others.
Effective immediately, HUD will treat Fair Housing design and construction violations as occurring when construction is completed. A complaint to HUD’s Office of Fair Housing and Equal Opportunity must be filed within one year of the property’s initial certificate of occupancy. HUD also supports a two-year limitations period for private actions.
Why This Matters for Multifamily Owners
The change could be particularly meaningful for multifamily owners. It eliminates the ongoing risk of Fair Housing litigation around design and construction years after a project is completed, and it will simplify due diligence when a property is to be bought or sold.
How will this affect refinancing?
There is no word yet on how this change in HUD policy might impact refinancing with FHA, but we are watching closely to see how it translates into practice. We are cautiously optimistic that HUD will publish a Mortgagee Letter that does not require compliance with Fair Housing for FHA-insured refinances on properties that are at least one year out from their final Certificate of Occupancy.
For more on this and all the latest in FHA financing for multifamily, talk with AGM.
About AGM Financial Services, Inc.
Family-owned with over 30 years of experience, AGM has closed over $10 billion in FHA-insured multifamily project loans nationwide. We underwrite, fund, and service all of our loans. Developers and owners can count on AGM to be accessible, transparent, consistent, and ready to lend. From new construction to substantial rehabilitation to acquisition and refinance — for both market-rate and affordable projects — we can get the deal done. To learn more about AGM, call 800.729.4266 or visit agmfinancial.com.