# May 16, 2006 

# 

# MORTGAGEE LETTER 2006-11

## TO: ALL FHA-APPROVED MULTIFAMILY MORTGAGEES

**SUBJECT:** Increase in High Cost Percentage for FHA-Insured
Multifamily Housing in High-Cost Areas

Section 302(b) of the Federal Housing Administration Loan Limit
Adjustment Act of 2003 (Pub. L. 108-186, approved December 16, 2003)
allows the Secretary to grant exceptions to the maximum mortgage limits
set forth in Sections 207(c)(3), 213(b)(2)(B)(i), 220(d)(3)(B)(iii)(II),
221(d)(3)(ii)(II), 221(d)(4)(ii)(II), 231(c)(2)(B), and 234(e)(3)(B) of
the National Housing Act. The Secretary may increase the maximum
mortgage limits in the above sections by: (1) up to 140 percent in
geographical areas where cost levels so require, and (2) up to 140
percent, or up to 170 percent in high-cost areas, where necessary on a
project-by-project basis. By final rule published at 69 FR 10106, March
3, 2004, 24 CFR §200.15, "Maximum Mortgage" was revised to conform to
the statutory changes made by Section 302(b).

The Department has prepared a list of High Cost Areas that may be
eligible for the maximum 170 percent increase on a project-by-project
basis. This list is attached and also will be posted on the HUD website
along with the list of Base City High Cost Percentages for FHA Statutory
Mortgage Programs for calendar year 2006.

Please note that the 2006 Base City High Cost Percentages, and the list
of High Cost Areas, were effective as of January 1, 2006.

Sincerely,

Brian D. Montgomery

Assistant Secretary for Housing--

Federal Housing Commissioner

Attachment

> Attachment

+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| The High Cost Percentages shown are                          |   |   |   |   |   |   |   |   |
| [multipliers]{.underline} of the Basic Statutory Mortgage    |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| Limits.                                                      |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
|                                                              |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| Cities shown within the High Cost Areas box are designated   |   |   |   |   |   |   |   |   |
| as High Cost                                                 |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| Areas for calendar year 2006**.**                            |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
|                                                              |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| Hubs/ Program Centers with jurisdiction over these cities    |   |   |   |   |   |   |   |   |
| are eligible to increase                                     |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| their assigned High Cost Percentage (HCP) to a multiplier of |   |   |   |   |   |   |   |   |
| [270 percent]{.underline} times                              |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| the Basic Statutory Mortgage Limits on a case by case basis. |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| Because of the massive destruction caused by Hurricanes      |   |   |   |   |   |   |   |   |
| Katrina and Rita in 2005, High Cost Area status has been     |   |   |   |   |   |   |   |   |
| extended for calendar year 2006 to the following areas in    |   |   |   |   |   |   |   |   |
| order to assist HUD clients in rebuilding damaged areas and  |   |   |   |   |   |   |   |   |
| accommodating relocated families:                            |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| All jurisdictions in the State of Louisiana;                 |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| All jurisdictions in the State of Mississippi;               |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| All jurisdictions in the State of Alabama;                   |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| In the State of Texas, all areas under the jurisdiction of   |   |   |   |   |   |   |   |   |
| the following Offices:                                       |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| -   Fort Worth Hub;                                          |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| -   Dallas Program Center;                                   |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| -   Houston Program Center;                                  |   |   |   |   |   |   |   |   |
|                                                              |   |   |   |   |   |   |   |   |
| -   San Antonio Program Center                               |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
|                                                              |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| Hubs/ Program Centers with jurisdiction over other areas     |   |   |   |   |   |   |   |   |
| (with the exception of                                       |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| Special Limit Areas) are eligible to increase their assigned |   |   |   |   |   |   |   |   |
| HCP to a multiplier of                                       |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| 240 percent times the Basic Statutory Mortgage Limits on a   |   |   |   |   |   |   |   |   |
| case-by-case basis.                                          |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
|                                                              |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+
| Special Limit Areas have an HCP multiplier of 360 percent.   |   |   |   |   |   |   |   |   |
+--------------------------------------------------------------+---+---+---+---+---+---+---+---+

  --------------------------------------- ---- ---- ------------- ----- ----
  **[HIGH COST AREAS]{.underline}**                                      

                                                                         

  ALBANY NY                                                       217   \%

  ATLANTA GA                                                      192   \%

  BALTIMORE MD                                                    220   \%

  BANGOR ME                                                       221   \%

  BIRMINGHAM AL                                                   187   \%

  BOISE ID                                                        175   \%

  BOSTON MA                                                       240   \%

  BUFFALO NY                                                      240   \%

  BURLINGTON VT                                                   207   \%

  CAMDEN NJ                                                       240   \%

  CHARLESTON WV                                                   206   \%

  CHICAGO IL                                                      240   \%

  CINCINNATI OH                                                   206   \%

  CLEVELAND OH                                                    222   \%

  COLUMBIA SC                                                     214   \%

  COLUMBUS OH                                                     200   \%

  DALLAS TX                                                       177   \%

  DENVER CO                                                       238   \%

  DES MOINES IA                                                   186   \%

  DETROIT MI                                                      240   \%

  FORT WORTH TX                                                   179   \%

  GRAND RAPIDS MI                                                 202   \%

  GREENSBORO NC                                                   240   \%

  HARTFORD CT                                                     240   \%

  HOUSTON TX                                                      176   \%

  INDIANAPOLIS IN                                                 208   \%

  JACKSON MS                                                      180   \%

  JACKSONVILLE FL                                                 186   \%

  KANSAS CITY MO                                                  217   \%

  KNOXVILLE TN                                                    185   \%

  LOS ANGELES CA                                                  240   \%

  LOUISVILLE KY                                                   204   \%

  MANCHESTER NH                                                   221   \%

  MEMPHIS TN                                                      182   \%

  MIAMI FL                                                        229   \%

                                                                        

  MILWAUKEE WI                                                    240   \%

  MINNEAPOLIS MN                                                  240   \%

  NASHVILLE TN                                                    192   \%

  NEW ORLEANS LA                                                  180   \%

  NEW YORK NY                                                     240   \%

  NEWARK NJ                                                       240   \%

  OKLAHOMA CITY OK                                                178   \%

  OMAHA NE                                                        206   \%

  PHILADELPHIA PA                                                 240   \%

  PHOENIX AZ                                                      187   \%

  PITTSBURGH PA                                                   222   \%

  PORTLAND OR                                                     228   \%

  PROVIDENCE RI                                                   240   \%

  RENO NV                                                         210   \%

  RICHMOND VA                                                     200   \%

  SACRAMENTO CA                                                   240   \%

  SALT LAKE CITY UT                                               189   \%

  SAN ANTONIO TX                                                  168   \%

  SAN DIEGO CA                                                    240   \%

  SAN FRANCISCO CA                                                240   \%

  SAN JUAN PR                                                     230   \%

  SANTA ANA CA                                                    240   \%

  SEATTLE WA                                                      240   \%

  SHREVEPORT LA                                                   171   \%

  SPOKANE WA                                                      199   \%

  SPRINGFIELD IL                                                  236   \%

  ST. LOUIS MO                                                    236   \%

  TAMPA FL                                                        223   \%

  TOPEKA KS                                                       183   \%

  WASHINGTON DC                                                   240   \%

  WILMINGTON DE                                                   238   \%
  --------------------------------------- ---- ---- ------------- ----- ----

  --------------------------------------- ---- ---- ------------- ----- ----
  **[OTHER (NON-HIGH COST)                                               
  AREAS]{.underline}**                                                  

                                                                         

  ALBUQUERQUE NM                                                  170   \%

  CASPER WY                                                       157   \%

  FARGO ND                                                        166   \%

  HELENA MT                                                       174   \%

  LITTLE ROCK AR                                                  166   \%

  LUBBOCK TX                                                      168   \%

  SIOUX FALLS SD                                                  168   \%

  TULSA OK                                                        174   \%

                                                                         

                                                                        

  **[SPECIAL LIMIT AREAS]{.underline}**                                  

  US VIRGIN ISLANDS.                                              360   \%

  HONOLULU HI                                                     360   \%

  ANCHORAGE AK                                                    360   \%
  --------------------------------------- ---- ---- ------------- ----- ----