HUD Opens 30-Day Express Lane for LIHTC Multifamily Loans

HUD wants underwriting and closing done in 30 days. On Monday, the agency released a mortgagee letter creating an "express lane" that speeds up Federal Housing Administration-insured construction financing for eligible Low-Income Housing Tax Credit multifamily projects.

The changes cut paperwork and widen eligibility for Multifamily Section 221(d)(4) New Construction Loans. The goal, per the letter, is making FHA financing more efficient "by reducing processing times for highly experienced and capable LIHTC developers" — and completing the review and closing process within 30 days.

"The whole idea is to have HUD move these reviews quickly and expeditiously because these are lower-risk deals," Frank Cassidy, former FHA commissioner and assistant secretary for housing at HUD, told Multifamily Dive. As affordable housing, "[LIHTC projects are] in HUD's mission, and it's bringing new housing supply online."

Where did the express lane come from?

The model already works. HUD built the new pathway on the Section 232 Express Lane for senior housing healthcare facilities, released in July 2025, which Cassidy — now a senior managing director at Walker & Dunlop — helped enact while in office. "It was a huge success, and we said, 'Hey, why don't we do something like this with multifamily?'" Cassidy said.

He also helped develop the LIHTC Express Lane during his tenure, arguing that "not every deal needs to go through the same cookie-cutter review process." LIHTC deals are low-leverage and highly vetted, he noted, and "these are typically low loan-to-cost deals because there's so much tax credit equity."

What does the express lane actually change?

The initiative makes six concrete moves for LIHTC 221(d)(4) loans:

• Eliminates the eligible project size limit of 200 units or less.
• Permits new construction of 4% LIHTC transactions with tax-exempt bonds.
• Restores the standard 80% loan-to-cost limit.
• Eliminates the required 25% deferred developer fee.
• Streamlines and limits the deliverables required before the application.
• Reemphasizes the 30-day firm commitment decision timeline.

Both 4% LIHTC transactions with tax-exempt bonds and 9% LIHTC transactions qualify. There are guardrails, though. Projects must carry LIHTC-restricted rents "but cannot include HUD Multifamily Section 8 Project-Based rental assistance because the time involved in determining Section 8 rents is not congruent with an expedited review," per the letter. Developments with environmental risk factors requiring extensive HUD analysis are out too.

The letter also spells out experience requirements for the development team, general contractor, architect and management agent. HUD's loan sizing and underwriting standards stay the same, as required by the Multifamily Accelerated Processing Guide.

Does speed actually translate to deals closed?

Cassidy says the senior housing precedent answers that. "Now being in the private sector and done a couple of these [Section 232] deals, we've gotten commitments in like two to three days," he said. "I just actually closed two deals in 54 business days from submission to closing, which would have typically been unheard of for HUD."

If the LIHTC lane tracks that performance, experienced affordable developers could bring new restricted-rent housing online faster — at a moment when every month of delay adds cost to projects already squeezed by construction budgets.