FHA Multifamily Loans

The Benefits of FHA-Insured Multifamily Loans

Are you a multifamily developer looking for a better way to finance your projects? Look no further than FHA.

Multifamily developers are facing new realities. Costs are up, interest rates are up, and banks are pulling back from CRE lending, including multifamily. As a result, new apartment starts are falling.

In the midst of this uncertainty, AGM provides financing for multifamily developers and owners with lower interest rates and better terms compared to commercial loans.

Why FHA?

AGM provides financing and refinancing for multifamily builders and developers. FHA-insured loans generally require less equity, offer more competitive interest rates, and offer better terms than commercial loans.

More specifically, FHA offers the following:

High Leverage
Developers can maximize leverage, reduce equity, and boost returns with up to 85% financing.

Fully Amortizing Loan with up to a 40-Year Term
With a 40-Year Term for New Construction With up to 40-year terms, FHA-insured loans offer higher leverage and lower payments while eliminating refinance risk.

Competitive Fixed Rates
Offering some of the lowest fixed rates available, FHA-insured loans eliminate interest rate risk.

Low DSC
(1.176 for Market Rate & 1.150 for Affordable)
Along with longer amortization and term, lower DSCs mean greater leverage and more proceeds.

Fully Nonrecourse Construction & Permanent Financing
With FHA financing, borrowers need not put up any personal or corporate guaranties.

Fully Assumable
FHA-insured loans are fully assumable at a very low cost. FHA’s lower interest rates can add value when selling a multifamily property with debt in place.

If you’re considering the new construction, substantial rehabilitation, acquisition or refinance of multifamily rental housing, affordable housing, or senior housing, FHA multifamily loans stand alone as the most reliable and advantageous financing choice.

Understanding FHA Multifamily Construction Loans

FHA loans are insured by the Federal Housing Administration for multifamily rental properties with more than four units and are available for both new construction and significant rehab projects.

FHA Risk Versus Reward: AGM Tips the Scale in Your Favor

For more than 30 years, AGM has been focused on the relationships we develop, not just the deals we’ve closed. That’s why more than 60% of our borrowers are repeat clients — who have repeatedly benefited from FHA lending.

So why aren’t more multifamily developers turning to FHA financing?

Unfortunately, some misconceptions have held others back. If you have questions about FHA financing, please contact us. We’re more than happy to share our expertise.

Exploring FHA Loan Options

FHA-insured loans in the Multifamily Accelerated Processing (MAP) program have a number of common features.

All FHA-insured multifamily loans are non-recourse, have fixed rates and long terms, and are fully amortizing. All offer higher leverage and lower debt service coverage. Borrowers pay a modest Mortgage Insurance Premium (MIP) for the life of the loan.

FHA financing works for projects with age restrictions, ancillary commercial space, ground leases, tax credits, tax abatements, and, for affordable projects, multiple layers of secondary debt. FHA debt is not available to student housing, hotels or Airbnb-style short term rentals.

Acquisition or Refinance

Section 223(f)

New Construction or Substantial Rehabilitation

Section 221(d)4 – Family Apartments
Section 220 – Family Apartments, Urban Areas and Opportunity Zones
Section 231 – Elderly Only, 62+
Section 241(a) – Supplemental (2nd) Mortgage for rehab or expansion of a property with an existing FHA-insured loan

Streamlined Refinance of HUD-Insured Projects

Section 223(a)(7)

Loan Modifications (Interest Rate Reduction)

AGM Can Help You Get Your Deal Done!

With our industry experts and decades of experience, we can help you navigate FHA financing so you don’t have to go it alone. Contact us today and learn more about leveraging FHA financing options for your next multifamily development project.