2025 GREEN MIP ELIMINATION & OVERALL MULTIFAMILY MIP REDUCTION
Frequently Asked Questions
JULY 2025
On June 24th, 2025, HUD announced a proposal to eliminate ongoing Green MIP reporting obligations and for all new multifamily insured loans to have 0.25% MIP for upfront and ongoing MIP. This proposal is subject to a 30-day comment period plus an approximately 30-day period for HUD’s review, responses and final rule publishing. Please find below answers to frequently asked questions. For further information, please reach out to your Berkadia representative.
All discussion below assumes the proposed MIP goes through as currently drafted.
When does the new MIP become effective?
There is a 30-day comment period. After that, HUD must review all comments received and make changes HUD deems appropriate to the regulation. After that occurs, HUD will publish a final rule. We expect the final rule will be effective as soon as it is published, which will likely occur near the end of the summer.
Applications prior to Commitment:
How do I switch my application to eliminate the Green requirements now that all MIP is 25bps?
Your Berkadia team will make the appropriate request to eliminate all requirements associated with achieving standards to receive Green MIP. We will make this request when the final rule is published.
For cost-limited applications which had previously incurred costs to pursue Green, are these sunk costs eligible as mortgageable costs?
Berkadia is compiling a list of comments associated with the proposed regulation. We will recommend to HUD that such costs remain eligible under the loan even if the Green MIP requirements are removed.
Applications with Commitments:
What action should be taken for non-Green applications that have a Firm Commitment?
Unless there are timing considerations, our suggested guidance is to wait until the final rule is published. After the publication, HUD has communicated that it will accept amendments to the firm commitment to comply with the new reduced MIP.
If there are timing considerations associated with closing, contact your Berkadia Mortgage Banker to discuss the pros and cons of delaying your closing until after the HUD regulatory process is complete. If the loan closes before the regulatory process is complete, there will not be a path to reducing MIP post-closing.
What action should be taken for Green MIP applications that have a Firm Commitment?
Unless there are timing considerations, our suggested guidance is to wait until the final rule is published. After the publication, your Berkadia team will file an amendment to the commitment that removes any Green MIP requirements and applies the new reduced MIP.
If there are timing/rate lock limitations, there are effectively two paths:
1. Close the loan with Green MIP in place, with the expectation that ongoing reporting will be removed as published in the proposed rule.
2025 GREEN MIP ELIMINATION & OVERALL MULTIFAMILY MIP REDUCTION
Frequently Asked Questions
JULY 2025
• Note: If there are repairs related to Green MIP and the loan is closed before the final rule, those repairs may will still be required.
• As stated previously, Berkadia is compiling a list of comments for HUD and we will recommend that such ‘Green’ repairs be eligible for removal post closing.
• We strongly believe the current proposal will remain intact and the reporting requirements will be removed upon publication of the final regulation.
2. If there is an option to delay closing without undue cost, contact your Berkadia Mortgage Banker to evaluate the pros and cons of closing now vs. waiting for a final rule.
For Construction Loans – can development scope be reduced to eliminate items and costs which were previously included for Green only?
The potential treatment of this circumstance is unclear at this time. Berkadia is compiling a list of comments associated with the proposed regulation. We will recommend to HUD that such costs remain eligible under the loan even if the Green MIP requirements are removed.
Closed Loans in Construction Period:
Must all construction be completed as previously approved by HUD?
From a historical perspective, loans closed with certain requirements have not received relief from those requirements, however we believe there may be an option given the language in the proposed regulation
Berkadia is compiling a list of comments associated with the proposed regulation. We will recommend to HUD that change orders to reduce the scope of construction for elements that were included only to be eligible for Green MIP be approved.
Closed (Post-Construction) Loans
Currently with Green MIP:
What action should be taken for in-place loans currently with Green MIP?
Due to the short nature of the time frame until the final rule is published, it is likely prudent for data collection to be paused until the final rule is published. In the event that the final rule removes the exemption, borrowers will need to continue Green reporting.
Based on the fact that HUD has a long history of changing their focus as administrations change, how do existing deals comply with their closing notes when HUD no longer wants annual reporting? Additionally, the required reporting website the EPA uses for annual audits is down. Is that permanent?
The final published regulation will supersede those closing notes.
How should planned, future refinances in four to eight years be approached? Should Green Certification be pursued now to plan for a future changing HUD leadership?
As we have seen, requirements can change with administration priorities, and it is certainly possible that new requirements will be published in the future related to energy efficiency. It is impossible to know when or whether such a change would occur, or to define potential scope. Speak with your Berkadia Mortgage Banker to weigh the pros and cons of obtaining such a certification.
What happens to loans that currently have a failing score?
Consistent with the guidance related to data collection above, our recommendation is to speak with your Berkadia team and coordinate a conversation with the HUD asset management professionals related to pausing evaluation pending the final rule. We believe HUD should be amenable to this approach.
