HUD launches LIHTC Express Lane to speed FHA construction loans for experienced developers

HUD issued Mortgagee Letter 2026-13 on Nov. 2, creating an Express Lane for FHA Section 221(d)(4) new-construction loans on 4% and 9% LIHTC deals, effective immediately, according to an alert from law firm Nixon Peabody. Eligible sponsors need at least three stabilized LIHTC deals in the past five years, $1 million in liquidity and $5 million in net worth, with experience thresholds also set for general contractors, architects and management agents. The initiative drops the earlier pilot's unit cap and 25% developer fee deferral requirement, restores the standard 80% loan-to-cost limit and keeps a 30-day target for firm commitment decisions. Projects with Section 8 project-based rental assistance are excluded, and standard underwriting thresholds still apply.