HUD issued Mortgagee Letter 2010-21 today. This letter changes the underwriting standards for new construction, refinances, and acquisition loans. Among other things it lowers the loan-to-value or cost ratios and raises the debt service ratios for market rate deals. New construction now 83.3% of cost and DSCR of 1.20. Refinance and Acquisistion loans are 83.3% of value and 1.20 DSCR. The industry anticipated the majority of the changes in the letter. How do you think it will impact your development?
