A New Financing Opportunity for Build-to-Rent Developers
HUD expands FHA eligibility to qualifying single-family rental communities.
For developers and investors in Build-to-Rent (BTR) communities, a significant new financing opportunity has opened up.
HUD just announced that qualifying rental developments consisting of detached single-family homes, duplexes, and triplexes can now access FHA multifamily mortgage insurance—an option previously unavailable to these types of communities.
What does this mean for developers?
Projects that previously fell outside FHA’s multifamily lending programs may now qualify for many of the same financing advantages available to traditional apartment developments, including:
- Long-term, fixed-rate financing for greater predictability
- Nonrecourse loans without personal guarantees, subject to standard exceptions
- Potentially higher leverage than conventional financing alternatives
- Flexible financing structures designed to support long-term investment goals
Which projects may qualify?
HUD’s expanded eligibility applies to qualifying Build-to-Rent communities under two FHA programs:
- New construction: Section 221(d)(4)
- Recently completed properties: Section 223(f) for acquisition or refinancing, provided the certificate of occupancy is less than three years old at application
Eligible developments must be located on a cohesive, contiguous site, operated as long-term rental housing, and professionally managed. Additional underwriting requirements apply.
Could this change the numbers on your next project?
Whether you’re planning a new BTR community or evaluating financing for a recently completed development, this policy change could open doors worth exploring.
At AGM Financial, we help developers look beyond conventional financing options to find solutions that support their investment objectives.
Let’s take a closer look at your project and determine whether FHA financing could be a fit.
Contact us to explore your build-to-rent financing options.
About AGM Financial Services, Inc.
Family-owned with over 30 years of experience, AGM has closed over $10 billion in FHA-insured multifamily project loans nationwide. We underwrite, fund, and service all of our loans. Developers and owners can count on AGM to be accessible, transparent, consistent, and ready to lend. From new construction to substantial rehabilitation to acquisition and refinance — for both market-rate and affordable projects — we can get the deal done. To learn more about AGM, call 800.729.4266 or visit agmfinancial.com.