Multifamily Finance Programs
U.S. Department of Housing and Urban Development (HUD) Multifamily Housing Programs
Lenders approved by HUD can participate in Federal Housing Administration (FHA) multifamily mortgage insurance programs, including programs for new construction, substantial rehabilitation, and refinance of rental and cooperative housing, as well as special needs, assisted living, and seniors housing. HUD also operates the Section 8 voucher program, which subsidizes rent payments for low-income individuals.
Federal Home Loan Banks
The Federal Home Loan Banks, through their affordable housing and community development programs, are serving lower income households, as they have since 1990. Federal Housing Finance Agency is responsible for establishing Affordable Housing Goals, maintaining data, annual reporting, and developing regulatory policies, as well as, conducting off-site monitoring and examinations of the Federal Home Loan Banks' housing and community investment programs and activities.
HUD Special Needs Multifamily Housing Programs
HUD Section 8 Programs
- HUD: Section 8 Rental Certificate Program is designed to serve very low-income families by providing a subsidy for the difference between 30 percent of the tenant's household income and the fair market rent.
- HUD: Office of Recapitalization, provides assistance and information for preservation of properties with expiring subsidies.
U.S. Department of Agriculture Rural Housing
The U.S. Department of Agriculture (USDA) offers several Rural Development Multifamily Housing Programs that offer loans and grants to developers of low-income community housing.
Fannie Mae offers financial products for affordable and market-rate rental housing on apartment buildings, condominiums, and cooperatives with five or more individual units. Fannie Mae multifamily programs include debt financing through lenders for small and large multifamily loans, seasoned pool purchases, and structured transactions. Fannie Mae-approved Delegated Underwriting and Servicing lenders can underwrite, close, and deliver most loans without pre-review by Fannie Mae. The company also provides credit enhancement for tax-exempt bonds issued to finance the acquisition, new construction, refinancing, or moderate or substantial rehabilitation of multifamily housing. Additionally, Fannie Mae offers forward commitments, which allow lenders to lock in rates.
Fannie Mae published a report discussing its role in the small multifamily loan market in early 2011.
Freddie Mac multifamily programs help to ensure an ample supply of affordable rental housing by purchasing mortgages on apartment buildings with five or more units. Freddie Mac enables the purchase, refinance, and rehabilitation of older buildings and the construction of new affordable apartments, as well as senior and student housing. Freddie Mac purchases loans on mid-rise, high-rise, walk-ups, garden-style apartment complexes, and co-op buildings (but not individual units). Freddie Mac purchases these loans from its network of Program Plus and Targeted Affordable Housing Correspondents with over 100 branches nationwide.