A New Initiative in the Federal Housing Administration's Office of Multifamily Housing Programs : An Assessment of Small Projects Processing

This article critiques the Federal Housing Administration's (FHA's) new processing option for small, multifamily mortgage insurance -- small projects processing (SPP). The authors review some of the motivations behind reforms at FHA multifamily and highlight how the SPP initiative is designed to serve some of HUD's broader affordable housing goals. The authors summarize the research to specify certain aspects of the SPP initiative, highlighting the discussions that took place with FHA, its consultants, lenders, developers, and other government representatives. They identify the aspects of traditional multifamily finance programs that make them difficult to use in serving the small loan market, and contrast these aspects against the actual reforms adopted as part of the SPP initiative. Finally, the authors propose additional steps in the further development of SPP and the ongoing reforms of FHA multifamily and the industry at large