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.
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.
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.
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 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.
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 2530, which details a borrower/principal’s past participation in any HUD multifamily projects, as well as any participation involving other housing agencies.