For most HUD 223(f) borrowers, annual MIP was 0.60% of the loan amount (reduced for affordable properties). For applications submitted or amended on or after October 1, 2025, HUD eliminated the 2016 MIP rate categories, including the Green MIP Reduction; the MIP is now a flat 0.25% upfront and 0.25% annual (90 FR 45789).
Green Improvements Allow Borrowers to Save on MIP
FHA mortgage insurance premiums, or MIPs, are one of the most important expenses that HUD 223(f) borrowers need to factor into their budget. For most HUD 223(f) borrowers, annual MIP was 0.60% of the loan amount for conventional properties until October 1, 2025, and 0.45% for affordable properties. For applications submitted or amended on or after that date, HUD's Green MIP Reduction program was eliminated along with every other 2016 MIP category: the MIP is now a flat 0.25% upfront and 0.25% annual for all property types (90 FR 45789).
How Can Borrowers Qualify for a Green MIP Reduction?
In order to qualify for a green MIP reduction, a property must be certified and reach a specific score with one of the following certification programs:
Energy Star High Rise or Home
NGBS
LEED
Green Point Rated New Home Multifamily
Passive House, Enterprise Green Communities
Earthcraft
Earth Advantage
Living Building Challenge
When it comes to qualifying for an MIP reduction, Energy Star's program is one of the most popular on the market. In order to qualify, properties need to achieve an Energy Star Statement of Design Intent (SEDI) score of 75 or above (which will be subject to annual inspection and recertification) in order to achieve and maintain their annual MIP discount.
DO hud 241(a) Supplemental Loans qualify for a green mip reduction?
If you already have a property with a HUD 223(f) loan, you may be able to get supplemental financing through the HUD 241(a) loan program. Before the category eliminations of October 1, 2025, that supplemental financing could also qualify for a green MIP reduction of 0.25% to 0.35%. Green MIP reductions are no longer available on any multifamily application submitted or amended on or after that date (90 FR 45789)TO LEARN MORE ABOUT FHA 223F LOANS, get a financing quote AND A HUD LENDING EXPERT WILL GET IN TOUCH.
Related Questions
What is the Green MIP Reduction for HUD 223(f) loans?
The Green MIP Reduction program for HUD 223(f) loans permits an annual MIP reduction to 0.25% for properties that have made significant energy efficient improvements. In order to qualify, a property needs to achieve a score of 75 or more on Energy Star's Statement of Design Intent (SEDI) examination or a comparable score on another approved green building certification.
If you already have a property with a HUD 223(f) loan, you may be able to get supplemental financing through the HUD 241(a) loan program. In many cases, that supplemental financing can also qualify for a green MIP reduction of 0.25% to 0.35%. If a borrower uses a HUD 241(a) loan to make green upgrades to their property, they may be able to seek a reduced MIP on both their original HUD 223(f) loan and their new HUD 241(a) supplemental loan.
For most HUD 223(f) borrowers, annual MIP is 0.60% of the loan amount for conventional properties. In contrast, affordable properties receive a reduced MIP of 0.45%. However, with HUD's Green MIP Reduction program, borrowers can get a discounted 0.25% annual MIP, as long as they make energy-efficient improvements to their property and receive a high enough score on an approved certification.
How can I qualify for the Green MIP Reduction for HUD 223(f) loans?
In order to qualify for a green MIP reduction, a property must be certified and reach a specific score with one of the following certification programs:
- Energy Star High Rise or Home
- NGBS
- LEED
- Green Point Rated New Home Multifamily
- Passive House, Enterprise Green Communities
- Earthcraft
- Earth Advantage
- Living Building Challenge
When it comes to qualifying for an MIP reduction, Energy Star's program is one of the most popular on the market. In order to qualify, properties need to achieve an Energy Star Statement of Design Intent (SEDI) score of 75 or above (which will be subject to annual inspection and recertification) in order to achieve and maintain their annual MIP discount.
What are the benefits of the Green MIP Reduction for HUD 223(f) loans?
The Green MIP Reduction program for HUD 223(f) loans allows borrowers to receive a discounted 0.25% annual MIP, as long as they make energy-efficient improvements to their property and receive a high enough score on an approved certification. This is a significant reduction from the 0.60% annual MIP for conventional properties and 0.45% for affordable properties.
For more information, please see the following sources:
What are the requirements for the Green MIP Reduction for HUD 223(f) loans?
The Green MIP Reduction program for HUD 223(f) loans permits an annual MIP reduction to 0.25% for properties that have made significant energy efficient improvements. In order to qualify, a property needs to achieve a score of 75 or more on Energy Star's Statement of Design Intent (SEDI) examination or a comparable score on another approved green building certification.
How much can I save with the Green MIP Reduction for HUD 223(f) loans?
You can save up to 0.35% on your annual MIP with the Green MIP Reduction program for HUD 223(f) loans. This program permits an annual MIP reduction to 0.25% for properties that have made significant energy efficient improvements. In order to qualify, a property needs to achieve a score of 75 or more on Energy Star's Statement of Design Intent (SEDI) examination or a comparable score on another approved green building certification. More information can be found here.