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Amortize Good Design in Your Mortgage November 21 2006

The following great news appeared in the November 20, 2006 issue of the AIA Angle:

The U.S. Department of Housing and Urban Development has said that architects’ fees may be included in Federal Housing Administration (FHA)-insured mortgages.

The AIA, primarily through its Small Project Practitioners Knowledge Community, has been working to make architectural design services more broadly available to the middle class. In a letter to HUD, the AIA Government Advocacy team wrote, “A major barrier to providing such services on new single family homes is that the cost of design often matches or exceeds the equity requirement for the loan . . . The AIA believes that design fees, including services by architects and their supporting engineers and consultants, should be amortized in the mortgage.”

In response, Margaret E. Burns, director of the Office of Single Family Program Development, wrote to the AIA that “While [HUD’s] guidance does not explicitly allow for the inclusion of design fees for new construction (including services by architects and their supporting engineers and consultants), it is not adverse to such a fee being included in the cost of acquisition, similar to how the contractor’s price to build is now included.”

According to Andrew Goldberg, Assoc. AIA, manager of AIA federal regulatory affairs, “HUD’s position means that more Americans will now have access to architectural services than ever before. By stating that design fees should be treated similarly to construction costs, HUD is affirming the view that high-quality design is an integral and necessary part of homeownership.”

The AIA plans to work with HUD and the banking community to ensure that prospective homeowners and lenders understand that design fees can be included in mortgages.

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The Angle is published by the AIA Government Advocacy Team, 1735 New York Ave., NW, Washington DC, 20006. To contact The Angle, send an email to angle@aia.org.