The Federal Housing Administration (FHA) is a government agency that was founded in 1934 by the Roosevelt administration. For more than 85 years, the FHA has provided mortgage insurance for lending institutions that issue loans to buyers of multifamily properties. From its humble beginnings, FHA has to date guaranteed the loans of millions of real estate transactions. Today, FHA is a division of the department of Housing & Urban Development (HUD) and is charged with overseeing the management of HUD’s housing loan programs.
HUD FHA insured mortgages play an important role in providing liquidity to the multifamily and healthcare communities. Because the mortgages are insured by the FHA, HUD approved lenders are able to assume a greater level of risk and provide borrowers with the most aggressive rates and terms in the market.
All mortgages are approved by HUD and insured by the FHA. Mortgages are underwritten and processed through a select group of HUD approved lenders and funded through the issuance of GNMA Mortgage Backed Securities.
The Types Of FHA Multifamily Property Loans
There are several FHA Multifamily loan program options available to borrowers.
HUD 223(f) apartment loans are available for the acquisition or refinancing of 5+ unit multifamily properties and are a great financing option for borrowers looking for maximum leverage and longer fixed rates/terms.
FHA Construction & Rehab Loans
The FHA/HUD 221 (d)(4) loan program provides assumable non-recourse construction and permanent financing for new apartments or substantial rehabilitation of existing apartments. This loan program allows 85% loan to cost, offers a 40-year term and amortization. The low fixed rate is interest only during construction, and then is converted to a permanent loan with the same rate fully amortized. This removes the interest rate risk during the construction period.
Cooperative Housing Units (Co-ops) & Condominiums
Mortgages financed under Section 213 of the National Housing Act are insured by the Federal Housing Administration (FHA) to facilitate the construction, rehabilitation and purchase of cooperative housing facilities. Section 213 enables non‐profit corporations, non‐profit cooperative housing corporations or trusts to develop housing projects to be operated as cooperatives by resident shareholders.
Contact Us Today
The highly knowledgeable team at LSG Lending Advisors have helped many clients obtain FHA approval for their multifamily property projects. We can also introduce you to some of the best FHA lenders that the industry has to offer. Navigating the FHA approval process can be complex, so let us put our years of industry know how and experience to work for you. Contact us today to learn more about how LSG Lending Advisors has helped so many investors conduct successful FHA multifamily property transactions.