HUD has announced that its Federal Housing Administration (FHA) is expanding access to rental housing by allowing build-to-rent (BTR) communities to qualify for FHA-insured financing under two of its multifamily mortgage insurance programs.
The update, which is effective immediately, should make it easier to finance new rental homes and helps increase the supply of rental housing, particularly in light of manufactured housing innovation, HUD says.
“America needs more affordable housing. We’re eliminating barriers to spur development, expand rental options, and improve housing affordability for hardworking American families,” said secretary Scott Turner.
Through the updated policy, BTR communities will now be treated under the same terms and conditions as traditional multifamily rental developments, subject to the specific requirements outlined in HUD’s Mortgagee Letter.
“Expanding housing supply, including new rental housing, is essential to improving affordability,” said Joe Gormley, currently overseeing the FHA and Office of Housing. “Combined with other initiatives we are working on at HUD, including chassis removal in our manufactured housing programs, we are unshackling the market to deliver housing where it’s needed most.”
HUD says FHA’s updated policy reflects growing demand for single-family, duplex, and triplex rental housing, as well as the expanding presence of professionally managed BTR developments. The policy applies to FHA’s Section 221(d)(4) program for new construction and Section 223(f) program for acquisition or refinancing of recently developed rental communities, HUD points out.
