HUD's Green MIP Reduction program was eliminated for applications submitted or amended on or after October 1, 2025 (90 FR 45789). It had never been available for HUD 232 or HUD 232/223(f) healthcare loans.
HUD 232 Loans and the Green MIP Reduction Program
Unfortunately, HUD's Green MIP Reduction program is not currently available for HUD 232 and HUD 232/223(f) loans. The program is currently available for HUD 223(f) acquisition and refinancing loans, HUD 221(d)(4) construction and substantial rehabilitation loans, and HUD 223(a)(7) refinancing loans. It 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.
Industry advocates, including a group from the Committee on Healthcare Financing, had encouraged HUD to allow Section 232 and Section 242 mortgages into the program. HUD instead eliminated the Green MIP category entirely for applications on or after October 1, 2025 (90 FR 45789).
Related Questions
What is a HUD 232 loan?
A HUD 232 loan is a loan insured by the U.S. Department of Housing and Urban Development (HUD) that is used to finance the construction and rehabilitation of facilities for elderly individuals requiring medical care or other long-term care, as well as the purchase and refinancing of senior-focused healthcare properties. HUD-held loans are loans that are held by HUD and are used in relation to FHA 232 financing. To learn more about HUD 232 loans, please get a financing quote to speak to a HUD/FHA loan expert.
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What is a Green MIP reduction?
A Green MIP reduction was a program offered by the Department of Housing and Urban Development (HUD) that allowed borrowers to receive a discounted annual MIP of 0.25% if they made energy-efficient improvements to their property and received a high enough score on an approved certification. For applications submitted or amended on or after October 1, 2025, HUD eliminated the 2016 MIP rate categories, including the Green/Energy-Efficient MIP reduction, for the multifamily programs it had covered: HUD 223(f) acquisition and refinancing loans, HUD 221(d)(4) construction and substantial rehabilitation loans, and HUD 223(a)(7) refinancing loans (90 FR 45789, published September 23, 2025).
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
While the program existed, Energy Star's program was one of the most popular qualification paths on the market. To qualify, properties needed an Energy Star Statement of Design Intent (SEDI) score of 75 or above (subject to annual inspection and recertification) to achieve and maintain the annual MIP discount.
The Green MIP Reduction program was never available for HUD 232 and HUD 232/223(f) healthcare loans. Before the program's elimination, industry groups had advocated extending it to Section 232 and Section 242 mortgages. The 2025 notice did not change the Section 232 MIP schedule; confirm the current 232 MIP with the desk before sizing a deal.
How do I qualify for a Green MIP reduction on a HUD 232 loan?
Unfortunately, HUD's Green MIP Reduction program is not currently available for HUD 232 and HUD 232/223(f) loans. The program is currently available for HUD 223(f) acquisition and refinancing loans, HUD 221(d)(4) construction and substantial rehabilitation loans, and HUD 223(a)(7) refinancing loans.
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%.
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
While the program existed, Energy Star's program was one of the most popular qualification paths on the market. To qualify, properties needed an Energy Star Statement of Design Intent (SEDI) score of 75 or above (subject to annual inspection and recertification) to achieve and maintain the annual MIP discount.
What are the benefits of a Green MIP reduction on a HUD 232 loan?
Unfortunately, HUD's Green MIP Reduction program is not currently available for HUD 232 and HUD 232/223(f) loans. The program is currently available for HUD 223(f) acquisition and refinancing loans, HUD 221(d)(4) construction and substantial rehabilitation loans, and HUD 223(a)(7) refinancing loans. It 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.
Many industry leaders, including a group from the Committee on Healthcare Financing, are encouraging HUD to allow Section 232 and Section 242 mortgages into the Green MIP Reduction program. If HUD 232 loans are allowed into the program, borrowers may be able to get an annual MIP reduction to 0.25% for properties that have made significant energy efficient improvements.
Are there any restrictions on Green MIP reductions for HUD 232 loans?
Unfortunately, HUD's Green MIP Reduction program is not currently available for HUD 232 and HUD 232/223(f) loans. Many industry leaders, including a group from the Committee on Healthcare Financing, are encouraging HUD to allow Section 232 and Section 242 mortgages into the program.