Affordable Housing Financing with FHA and AGM

How FHA Financing Benefits Affordable Housing Developers

Developers – both profit-motivated and mission-driven – are pivotal in shaping the landscape for affordable housing, an essential component of any thriving community. Each new multifamily apartment or townhouse project they undertake directly addresses the large and growing need for multifamily housing for low and moderate-income families and the elderly.

Tailored Financing Solutions That Meet Developer’s Needs

AGM offers FHA-insured construction / permanent senior financing insured by the Federal Housing Administration, a solid solution for affordable housing projects. Since 2004, we have lent more than $273 million to finance more than 5,000 units in twenty-seven RAD, RAD for PRAC, and RAD / Section 18 projects with PHAs all across the country.

Getting these projects financed requires a coordinated plan and an experienced lender, one you can trust to get your deal done.

AGM Provides Personalized Support To Closing & Beyond

At AGM, we originate, underwrite, close, fund, and service all of our loans. We have worked with for-profit and not-for-profit developers for more than 30 years. We’ve had great success harnessing the full potential of FHA with developers like you to get affordable housing done.

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AGM’s Affordable Housing Guides:

New Construction Substantial Rehab:

We offer FHA-insured 221(d)(4) construction / permanent loans to finance new affordable apartment construction or substantial rehabilitation with longer terms and amortization. A single loan covers up to two years for construction and a fully amortizing 40-year term, with no “hurdle” to get to the permanent phase, all at the same low fixed rate. The loan is fully nonrecourse and works well with the staged equity pay-ins favored by LIHTC investors.

A Boutique Lender with Over $10 Billion in Closed Deals

If you have questions during the process — from origination to underwriting to closing to funding to servicing — you can pick up the phone and talk to our owners. You can’t do that at the large institutions. Whether you’re a small or medium-sized developer in the multifamily space or a large developer new to affordable housing, AGM is a trusted partner you can count on. Rely on us to help you navigate the process, the rules, and timing that are critical to the success of your project.

Let’s Discuss Your Affordable Housing Project

Key advantages with FHA

At AGM, our team understands your needs because we’ve been in your shoes. That means we understand the importance of obtaining the right loan — one that fits your needs today and protects your legacy for years to come. No other financing solution can offer you the same benefits as FHA — higher leverage, lower fixed rates, and peace of mind for the long term.

Let’s take a closer look at the key advantages of FHA financing:

Tax Credit Financing

The Low-Income Housing Tax Credit Program is essential to creating affordable housing projects. FHA financing works in conjunction with tax credits and layers of subsidy to provide a complete financing solution. Tax credit investors understand FHA and like the certainty of a single loan with a rate fixed at closing. Developers like FHA’s lower rates, favorable equity pay-in schedules, and, of course, not having to sign guarantees.

Nonrecourse Loans

FHA financing offers nonrecourse loans, meaning your personal assets remain safe even in the event of loan default, allowing you to manage your balance sheet and reduce risk.

40-Year Amortization Term

FHA financing offers longer amortization than other types of loans. FHA’s 40-year amortization and term for new construction increases leverage, reduces the monthly payments, and lowers the risk profile for your affordable housing project.

Low Debt Service Coverage (DSC)

FHA financing offers 1.15 debt service coverage, giving you the option, with your LIHTC investor, to boost proceeds and fill gaps in the capital stack. We can go to 1.11 DSCR for properties that are 90%+ Section 8.

Construction & Permanent Financing

FHA financing is both construction and permanent financing, all in a single fixed-rate loan. No occupancy or performance hurdles mean an easier transition from construction to perm — all at the same fixed rate.

AGM Knows the Parts, the Players, and the Process

Affordable housing deals come with a lot of moving parts. At AGM, we have seen it all and done it all. For more than three decades, we have closed over $10 billion in FHA-insured multifamily project loans nationwide. We know the process and the players, including state agencies, bond issuers, and bond counsels, many layers of subsidy in the capital stack, and what your tax-credit investor wants and needs. We know the process and the timing, and we know how to get your deal to closing.

“AGM was a true partner throughout the process. During many challenging moments, AGM used their specialized knowledge and expertise to help us mitigate those challenges and navigate the transaction to settlement.”

Mansur Abdul-Malik

Senior Vice President, NHPF

Affordable Housing Lending Experience You Can Count On

We offer FHA-insured 221(d)(4) construction / permanent loans to finance new affordable apartment construction or substantial rehabilitation, both with longer terms and amortization. A single loan covers up to two years for construction and a fully amortizing 40-year term, with no “hurdle” to get to the permanent phase, all at the same low fixed rate. The loan is fully nonrecourse and works well with the staged equity pay-ins favored by LIHTC investors.

Navigating Tenant-Occupied Renovations with AGM

Substantial rehabilitation projects in existing affordable housing present unique challenges. Unlike new constructions, where developers have a blank canvas, rehabbing existing structures demands a delicate touch to minimize tenant disruption and get the job done.

At AGM, we understand the intricacies of in-place rehab and the regs that govern tenant relocation. It’s not just about moving people around, but about cost, timing, and taking care to protect the health and welfare of your residents. From relocation plans to construction draws to equity pay-ins to compliance, AGM is with you every step of the way in your in-place rehab.

Strong Relationships and Access to our Owners

It is your deal. AGM is here to help. AGM owners Margaret Allen and Myles Perkins have cultivated relationships with HUD staff all across the country and at senior levels in Washington. Our staff brings valuable experience in bond financing, development, and construction, not often found in other lenders. That experience can help you plan and structure your project and your financing to avoid problems down the road. With AGM, you can rest a little easier.

AGM has strong working relationships with state allocating agencies for tax credits and tax-exempt bonds. These relationships can help you to navigate the complexities of LIHTC and bond financing, ensuring you get the most – and avoid the worst- from the process.

AGM originates, underwrites, funds and services FHA-insured loans nationwide. In Maryland, we are the leading lender for bond-financed affordable housing with 5,500 units, 41 projects, and approximately $500 million in FHA-insured debt.

Margaret Allen
Founder & Owner

Myles Perkins
President & Owner

Solid Relationships Lead to Closed Deals

Unlike transaction-oriented lenders, we place a strong emphasis on building relationships and providing personalized service. We understand that, for you, the road is long, and the stakes in affordable housing deals are high. Our goal is to help you manage risk and avoid pitfalls along the way. We provide the support you need to get your deal done.

You can count on AGM to be accessible, transparent, consistent, and ready to lend. To discuss your next affordable housing project, call 800.729.4266 or fill out the form below, and we’ll get back to you on the next business day.