The HUD Exchange is a comprehensive online platform that provides tools, resources, and contact information for the organizations and individuals that partner with HUD. These often include nonprofit groups and state and municipal governments, but also include borrowers, lenders, and brokers involved in HUD’s multifamily loan programs. Through the HUD exchange, HUD multifamily borrowers can research almost every HUD program, platform and resource, as well as request a consultation with HUD.
The HUD Multifamily Database: What Borrowers Should Know
HUD provides public access to multiple databases relevant to their multifamily housing programs, including the HUD firm commitments and endorsements database, the HUD multifamily mortgage database, and the HUD terminated mortgages database. Each of these may have value to multifamily investors in different situations. In this article, we’ll review HUD’s main multifamily data sets and how borrowers, investors, and others can use them to their advantage.
Overall, the other data sets provided by HUD include:
Historical Production Tables
Currently Insured Mortgages
Maturing Subsidized Mortgages
Database of Terminated Mortgages
202 Direct Loans
Multifamily Assistance and Section 8 Contracts Database
Physical Inspection Scores
Limited Denials of Participation
Section 8 Preservation Tool
TRACS Tenant Characteristics Report
Multifamily Property / Contract / Rent & Utility Allowance Datasets
All relevant public data can be accessed here, on HUD’s multifamily data page.
FHA Multifamily Firm Commitments and Endorsements Database
The FHA Multifamily Firm Commitments and Endorsements Database provides information about recent firm commitments/endorsements issued by HUD. For prospective multifamily borrowers, this can be used to get a good idea on the exact types of properties that have actually been approved for funding, as it provides property name and location information, as well as exact loan types and amounts. It also provides the name of the lender that has issued each loan, so it may be also be helpful in locating a suitable HUD multifamily lender.
The HUD Multifamily Mortgage Database
The HUD Multifamily Mortgage Database is a record of all current HUD/FHA multifamily loans, and is updated on a monthly basis. The Multifamily Mortgage Database contains information including:
FHA/HUD Project Number
Amount of Units (for multifamily properties)
Amount of Beds (for healthcare properties)
Original/Final Endorsement Dates
Initial Mortgage Balance
First Payment/Maturity Date
Borrower Information (including name and address)
Servicer Information (including name and address)
Monthly Mortgage Payments (principal and interest)
Terminated Multifamily Mortgages Database
The HUD Terminated Multifamily Mortgages Database contains information on all terminated HUD/FHA Multifamily mortgages. Much like the Firm Commitments and Endorsements and Multifamily Mortgages Databases, the Terminated Mortgages Database can be very valuable to a multifamily borrower, as it shows them which properties have prepaid mortgages, which properties have defaulted, and which ones have been reassigned to new borrowers. Properties whose owners prepaid or assigned their mortgages may be more likely to have been successful investments, as the original owners might have sold them at a profit. New borrowers may wish to take lessons from these deals, or, in contrast, may want to look at the defaults in order to understand more about how to avoid them.
In general, the Terminated Mortgages Database contains most of the same information as the Multifamily Mortgages Database, as well as additional information about the loan servicer and the reason for termination.
Limited Denials of Participation
The Limited Denials of Participation dataset provides a list of appraisers, HUD multifamily lenders, borrowers, accountants and others who have been disqualified from participating in HUD’s multifamily lending programs, generally for a certain number of years. Some disqualification periods are as short as 1 day, while others may last for several decades. Borrowers may wish to check this list to ensure that any of the service providers they are working with are not currently disqualified from participation. In addition to the Limited Denial of Participation list, individuals and organizations that have been permanently banned from participation in the HUD’s multifamily loan programs can be found on the Excluded Parties Listing System (EPLS).
Multifamily Assistance & Section 8 Database
The Multifamily Assistance & Section 8 Database is another HUD multifamily dataset that may be of interest to some investors, particularly those who are investing (or are considering investing) in HUD’s Section 8 program). As it provides detailed information on Section 8 properties and contracts, it can give investors and excellent idea of where other Section 8 properties are located, and, to a certain degree, how they are doing financially. By reviewing this data, investors may be able to use it to help model their strategies off of successful Section 8 projects with a high community impact, while avoiding costly mistakes.
It is important to note that this data set is listed by contract, not by property, so there will often be multiple contracts for the same property. “Assisted unit count” provides the amount of units per contract, while “property total unit count” shows the amount of units for the property as a whole.
In addition, every contract includes the average ratio of gross contract rents to fair market rents (FMR), incorporating the amount of overall units and the fair market rent for units, based on the size of bedrooms. For those who are unfamiliar, fair market rents are a statistic published by HUD used to determine rental payments for many parts of the Section 8 program. They are localized, and vary based on city and county. It should be noted that, while the ratio of gross contract rents to FMRs is helpful, it may not be fully accurate, due to calculation errors and the fact that gross contract rents for projects often change.
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The HUD Section 8 program is the Department of Housing and Urban Development’s (HUD’s) flagship housing assistance program. Most Section 8 properties are governed under a Housing Assistance Payment (HAP) contract between HUD and the landlord. HAP contracts generally last between 5 and 20 years, with the majority being 20-year contracts. Most landlords are not obligated to renew their contract after it expires, but, in certain cases, some may be.
The Opportunity Zones Program offers a groundbreaking federal tax incentive designed to encourage development in some of the nation’s most economically distressed areas. Created as a result of the Tax Cuts and Jobs Act of 2017, the Opportunity Zones Program, or O-Zones Program, permits borrowers to defer paying their capital gains taxes until 2027, provided that they invest in an Opportunity Fund, a special financial vehicle which must invest at least 90% of its assets in a Qualified Opportunity Zone. With their long terms, high leverages, and low interest rates, HUD multifamily loans are ideal for developing multifamily properties in Opportunity Zones.
Capital Needs Assessments (CNAs), also known as Physical Needs Assessments, are property inspection reports that estimate the future costs of property maintenance, as well as determining the cost to repair any parts of a property that must be fixed urgently. Capital Needs Assessments are required during the application process for all HUD/FHA multifamily loans, including the HUD 221(d)(4), HUD 223(f), and HUD 223(a)(7) programs, as well as the HUD 232 loan for seniors healthcare properties.
The HUD 202 program was designed to increase the supply of supportive housing for low-income elderly individuals. To do this, it provided construction, acquisition, and refinancing loans, as well as capital advances to nonprofit groups. Section 202 housing was designed to provide seniors a way to live independently, while supporting them with daily functions like cooking and cleaning. The Section 202 program is no longer offering funds to borrowers (the last funds were issued in 2012), though many Section 202-funded properties are still fully operational.
HUD Form 92264, also known as the Multifamily Summary Appraisal Report, is one of the essential forms that an appraiser will need to complete and submit to HUD before a property can be approved for HUD multifamily financing. Understanding the form-- and its contents, can be extremely helpful for potential HUD multifamily borrowers, as it will help them appreciate exactly how the property want financing for will be evaluated by an appraiser.
The Low-Income Housing Tax Credit (LIHTC) program is a federal government tax credit, that, since 1986, has helped facilitate the construction and rehabilitation of approximately 2.4 million affordable housing units througout the U.S. Unlike tax deductions, which create a reduction in taxable income, tax credits provide a dollar-for-dollar reduction in an investor’s tax liability, which can be an incredibly attractive proposition.
HUD’s multifamily loan programs are some of the most popular apartment loans on the market, offering high leverage, non-recourse, fully amortizing financing at extremely competitive rates. While it’s much easier to determine exact numbers for Freddie Mac and Fannie Mae Multifamily loans (as they publish significantly more comprehensive year end reports), we’ve done our best to provide the most recent information about the top HUD/FHA multifamily lenders in the industry today. Despite the lack of available data from 2018, there’s not much reason to believe that this list will become substantially different over the next 8-12 months.
The Rental Assistance Demonstration (RAD) Program is a federal housing program administered by HUD, which was enacted in 2012 as a part of the Consolidated and Further Continuing Appropriations Act. The RAD program allows properties using HUD legacy programs to convert their properties to HUD Section 8 housing, which is much better understood, and more easily permits the use of private capital to fund rehabilitation work.
The HUD Section 8 program is the U.S. government's largest housing assistance program. In order to help low-income families find quality housing, a local Public Housing Authority (PHA), funded by HUD, will pay a private landlord part or all of the unit’s rent. The largest program within Section 8 is called the Housing Choice Voucher Program, which allows a family to choose their own unit from within the pool of Section 8 properties in their area.
Fair Market Rents (FMRs) are a statistic developed by HUD in order to determine payments for various housing assistance programs, most notably, the Section 8 Housing Choice Voucher Program. FMRs differ by local area, and are updated on an annual basis. You can determine current and historical FMRs for your area by visiting HUD’s FMR Dataset and Search Tool.
One of the most common misconceptions about HUD is that it focuses only on low-income, Section 8, and affordable housing. In reality, the HUD 223(f) program is available for all types of market-rate multifamily properties.
HUD 223(f) loans offer some of the best terms in the industry for the acquisition and refinancing of multifamily and apartment properties. These loans are non-recourse, offer high leverage, low interest rates, and lenient DSCR requirements. While HUD 223(f) loans have many benefits, they are often misunderstood.
Many people aren’t aware that FHA-insured financing offers some of the industry’s longest terms. For example, the HUD 221(d)(4) program is a fixed-rate construction loan. This product is fixed for 40 years plus up to 3 years for construction (43 years total). And HUD 223(f) loans are fully amortizing for as long as 35 years (as long as the term and amortization isn’t more than 75% of the property's remaining economic life).
Although HUD (the US Department of Housing and Urban Development) and the FHA (the Federal Housing Administration) were founded separately, they share many things. For example, HUD oversees residential and multifamily insurance programs. In contrast, the FHA primarily deals with residential lending for primary residences.
MAP, or Multifamily Accelerated Processing, is a streamlined loan application processing system developed for the specific purpose of speeding up approval times for HUD/FHA multifamily loans. In general, all rules for MAP loan applications are contained in the Multifamily Accelerated Processing (MAP) Guide, which was last published on January 29, 2016.
During the HUD multifamily loan application process, borrowers will have to submit a variety of different types of documentation to HUD. One of the most important parts of this process is the submission of HUD Form 2350, which details a borrower/principal’s past participation in any HUD multifamily projects, as well as any participation involving other housing agencies.