HUD Section 542(c)

FHA Risk-Sharing Program - HUD Section 542(c) Mortgages

Section 542(c) allows HUD and state and local housing finance agencies to provide risk-sharing arangements to assist those agencies to provide more credit and insurance for commercial housing loans.


Purpose

Section 542(c) allows credit improvement for multifamily housing projects whose loans are processed, underwritten, serviced, and disposed of by HFAs. HUD and HFAs share in the risk of the mortgage. The program serves as a pilot to assess the feasibility of risk-sharing partnerships between HUD and qualified State and local HFAs in providing affordable housing.

Eligible Uses

State and local housing finance agencies participating in this program may underwrite and originate affordable housing loans. This program provides full FHA loan insurance to improve HFA bonds to investment grade.

To be eligible the HFA must: 1) carry the designation of "top tier" or its equivalent as evaluated by Standard & Poor's or another nationally recognized rating agency; or (2) receive an overall rating of "A" for the HFA for its general obligation bonds from a nationally recognized rating agency; and (3) otherwise demonstrate its capacity as a sound, well-managed agency that is experienced in financing multifamily housing; and (4) have at least 5 years experience in multifamily underwriting; and (5) be a HUD-approved multifamily mortgagee in good standing.

Eligible Borrowers

Eligible borrowers include public entities, investors, developers, builders, and private non-profit corporations or associations may apply to a qualified QPE and/or its lender.

FHA Multifamily Mortgages

Multifamily Loans
Cooperative Housing - Section 213 Existing Multifamily Rental Housing - Sections 207/223(F)
Housing Finance Agency Risk-Sharing - Section 542(c) Manufactured Housing - Section 207
Rental & Cooperative Housing - 221(d)(4) Rental Housing - Section 207
Rental Housing for Urban Renewal and Concentrated Development Areas - Section 220 Risk-Sharing Program - Qualified Participating Entities (QPE) - Section 542(b)
Senior Housing - Section 231 Supplemental Multifamily Loans - Section 241

FHA Special Needs Housing Loans

FHA Special Needs Housing Mortgages
Assisted Living Conversion Program (ALCP) Demonstration Program for Elderly Housing for Intergenerational Families
Emergency Capital Repair Program (ECRP) Supportive Housing for the Elderly Program - Section 202
Supportive Housing for Persons with Disabilities - Section 811

FHA Health Care Mortgages

FHA Health Care Mortgages
Hospital Facilities - Section 242 Residential Care Facilities - Section 232

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