FHA unveiled a new pilot program on Feb 10th that will shorten the approval process of LIHTC deals. What used to take as long as one year can now take as little as 90 to 120 days. The pilot program comes as welcome news to affordable housing developers that can utilize these loans on projects that they may not have been able to do previously. This has the potential to become an incredible driver of affordable housing development because FHA rates for affordable housing are lower than traditional bank rates. The impediment for most LIHTC developers in using FHA loans is the requirement to close on your LIHTC award by a certain time, and traditionally you were not able to close your FHA mortgage in time to meet your state financing agency’s requirements. This pilot program may change that and provide an additional source of finance for many developments through reduced interest rates on loans which will require less federal and state subsidy to make a project “pencil”.