CARH’S BROADCAST E-MAIL – Regulatory Alert

June 27, 2025

1) Rural Development Multifamily Housing Handbook 2-3560 Chapter 6 Updates

The Rural Housing Service (RHS) issued a Stakeholder Announcement on June 24th entitled, Rural Development Multifamily Housing Handbook 2-3560 Chapter 6 Updates. The Announcement states:

“The Rural Housing Service (RHS) Office of the Multifamily Housing (MFH) is announcing the July 1, 2025, effective implementation date of the Housing Opportunity Through Modernization Act (HOTMA).  To accommodate the required HOTMA changes, Rural Development (RD) published updates to Chapter 6 Handbook 2-3560 on June 13, 2025. All MFH tenant certifications effective on or after July 1, 2025, must comply with HOTMA requirements. However, between July 1, 2025, and January 1, 2026, RD will not penalize MFH owners for HOTMA-related tenant file errors during supervisory reviews.

HOTMA was signed into law on July 29, 2016, directing the Department of Housing and Urban Development (HUD) to update income calculation rules from the Housing Act of 1937. To implement HOTMA changes, HUD published a Final Rule on February 14, 2023, which updated regulations found in 24 CFR 5.609 and 24 CFR 5.611. However, HUD has decided to delay implementation for its programs until January 1, 2026. The HOTMA changes found at 24 CFR 5.609(a) and (b) and 24 CFR 5.611 affect the RHS Multifamily Housing portfolio.

For previously published RD guidance related to HOTMA, please refer to the following:

  • Unnumbered Letter published August 19, 2024, HOTMA Overview and projected timeline, with notable changes:
    • On October 3, 2024, MFH announced a delay in the implementation of HOTMA from January 1, 2025, to July 1, 2025.
    • RD has made a change in how unborn children are considered. Unborn children will be considered when determining household eligibility in regard to income.  A pregnant women will be considered a two-person household and will qualify under the income limits of a two-person household. The household will not receive a $480 deduction until after the child is born. This aligns RD with other affordable housing programs like HUD and LIHTC.
  • The updated Form RD 3560-8 Tenant Certification was published on December 6, 2024 (revised on April 18, 2025) and is available on the eForms The previous form has been re-numbered RD3560-8A to be used for tenant certifications effective prior to July 1, 2025.”​

2) Realignment of Multifamily Mortgage Insurance Premiums to Further Rental Housing Development and Financing

In the June 26th, Federal Register, HUD issued a Notice entitled, Proposed Changes in Mortgage Insurance Premiums Applicable to FHA Multifamily Insurance Programs. According to a supporting announcement from the Office of Multifamily Housing Programs, HUD is proposing “a sweeping realignment of Multifamily Mortgage Insurance Premiums (MIPs) across all FHA Multifamily programs. This proposal builds on HUD’s actions to implement President Trump’s Presidential Action on Delivering Emergency Price Relief for American Families and Defeating the Cost-of-Living Crisis, and his Executive Order on Unleashing American Energy.

The proposals in the notice will help expand cost saving benefits to all property types, lower financing costs, stimulate rental housing development, and reduce burdensome regulations. Specifically, the notice proposes to:

  • Realign all Multifamily Mortgage Insurance Premiums (MIPs) to 25 basis points for all Multifamily programs. Under this proposal, all FHA Multifamily loans would benefit from the exact same low MIP rate.
  • Concurrently eliminate the Green and Energy Efficient MIP (Green MIP) category established in 2016. This category becomes economically obsolete with the realignment of Multifamily MIPs.
  • Eliminate the requirements to evidence the initial green building achievement and the annual reporting of energy performance for all loans closed under a Green MIP rate.”

Comments on the proposals are due July 28, 2025. CARH is reviewing the Notice and will be submitting comments before the July 28th deadline. If you have any comments that you would like CARH to consider adding to our response, please submit them to carh@carh.org no later than July 21, 2025.

Please contact the CARH National Office at carh@carh.org or 703-837-9001 should you have questions or concerns.

For other news and information affecting the affordable rural housing industry, please visit the Newsroom on CARH’s website, www.carh.org.