Multifamily
HUD LIHTC Express Lane for 221(d)(4) New Construction
As of November 2, 2026, HUD offers a faster review and closing process for new construction tax credit projects financed with a 221(d)(4) loan, when an experienced LIHTC team is behind the deal. HUD's sizing and underwriting standards stay the same, and the process is shorter.
Which deals qualify
| Item | Requirement |
|---|---|
| Program | 221(d)(4) new construction |
| Tax credits | 4% LIHTC with tax-exempt bonds, or 9% LIHTC, with LIHTC-restricted rents |
| Rental assistance | Projects with HUD Multifamily Section 8 project-based rental assistance are not eligible |
| Size | No limit on loan amount or number of units |
| Sizing | HUD's standard 221(d)(4) loan-to-cost, DSCR and net operating income limits |
| Environmental | Not eligible with noise above 75 decibels, or contamination above unrestricted residential levels without an approved remediation plan |
Who qualifies
- Developer: managed and controlled by an experienced LIHTC developer that has developed, placed in service and stabilized at least 3 LIHTC projects in the past 5 years, at least one comparable in size and scope.
- Financial strength: $1 million of liquidity and $5 million of net worth from the developer entity and its principals, without outside guarantors. Developers relying on future developer fees from projects in process are not eligible.
- Track record: a stabilized LIHTC portfolio above 1.15 DSCR and 93% occupancy, and a clean HUD record if the team has one.
- General contractor: at least 5 221(d)(4) and LIHTC projects and 5 Davis-Bacon projects in the past 10 years, with working capital above HUD's 5% standard without pledged assets or money from a parent or principal.
- Architect: designed and supervised at least 5 221(d)(4) projects in the past 10 years.
- Management agent: currently operating at least 5 LIHTC properties.
- Existing HUD borrowers with prior credit approval who are active in LIHTC qualify automatically.
What gets faster
- Firm commitment: a 30-day target for HUD's decision.
- Concept meeting: still required, with priority scheduling.
- Market review: no separate HUD market analysis unless the regional director asks for one.
- Plans and reports: final plans, specifications and architecture, engineering and cost reports are due 15 days before closing, timed with the other funders' reviews, instead of with the application.
- Legal documents: the bond trust indenture, ground lease, organizational documents, title and subordinate financing can go to HUD's lawyers during processing.
- Tax credit equity: HUD requires only 10% of the equity at closing; the rest follows a schedule HUD approves.
Common questions
Does the Express Lane change how much I can borrow?
No. HUD sizes the loan with the same loan-to-cost, DSCR and net operating income standards as any 221(d)(4).
Does HUD's 2019 LIHTC pilot still apply?
Yes. The pilot stays in effect for its own projects. The Express Lane is a separate track for new construction.
Can a substantial rehab or a 223(f) use the Express Lane?
No. It is limited to 221(d)(4) new construction.
Does Davis-Bacon apply?
Yes, as on any 221(d)(4). The general contractor needs at least 5 Davis-Bacon projects in the past 10 years.
What has to happen before the application?
After the concept meeting, we submit information for HUD's tribal consultation, start the historic preservation review, prepare the initial floodplain or wetland notice where one applies, and provide information for the endangered species review.
Have a 4% bond or 9% deal with an experienced team? Send us the sources and uses, pro forma and the team's track record, and we'll size the 221(d)(4).
Updated November 2026. Source: HUD Mortgagee Letter 2026-13, Implementation of the Low-Income Housing Tax Credit (LIHTC) Express Lane Initiative for Multifamily Section 221(d)(4) New Construction Loans. Eligibility is at HUD's determination. Every loan is subject to HUD approval. Not a commitment to lend. See also: HUD 221(d)(4) construction loans | HUD build-to-rent loans | HUD loan types.