HUD Multifamily Housing Programs

  • October 14, 2019
  • admin@ohi

With real estate prices escalating day by day, affordable housing and quality housing is hard to come by. The U.S. Department of Housing and Urban Development or HUD launched the multifamily subsidized housing to ensure that the low to middle income group could find affordable housing and to tackle homelessness.

What is multifamily housing? It is a building or a group of buildings that houses multiple families. An apartment is an example of multifamily housing. But there are apartments everywhere. What sets them apart from subsidized multifamily housing?

Even though the multifamily housing is owned by private parties, they receive subsidies from the government on the mortgages under the condition that they would provide a percentage of the houses as affordable options for low to middle income occupants for a stipulated period. HUD may also provide mortgage insurance, subsidies on rent or financing with interest rate below the market rate. In return, HUD asks the owners to rent a portion of the housing in subsidized rates. There are many different programs under HUD.

Here is a brief overview of these programs:

Section 8

Section 8 is a voucher program under which the tenants pay a portion of the actual rent. The rest is paid by the government to the owner. Tenants usually pay around 30% of their adjusted income as rent. There are two types of vouchers under this program – one that is provided for a specific housing project and one that is provided for the tenant. The term of the subsidy contract can vary from 5 to 40 years.

Section 221

Under Section 221, subsection d3 and d4, the owner gets the subsidy in the form of reduced interest rate on the mortgage. The rent is a fixed amount irrespective of the tenant’s income. This amount should, however, be approved by the U.S. Department of Housing and Urban Development. Such housing projects are also known as Below Market Interest Rate or BMIR projects.

Section 236

Similar to the BMIR properties, the ones under Section 236 also have subsidized interest rate on their mortgages. The difference arises in the rent. HUD sets a basic rent amount. The tenant must pay the higher amount between the basic rent and 30% of the adjusted income. In this respect, Section 236 housing is the combination of Section 8 and BMIR properties. The tenants are eligible for rent subsidy under two programs within the ambit of Section 236:

• Rental Assistance Program: The rent is fixed at 30% of the tenant’s income
• Rental Supplement Program: The rent is the higher amount between 30% of the income and 30% of the gross rent.

Programs for Seniors and People with Disabilities

Seniors and people with disability are usually the most in need of affordable and quality housing. HUD offers loans and grants to non-profit organizations to develop housing projects that specifically cater to seniors and PwD. These come under Section 202 and Section 811.

Low-Income Housing Tax Credit Program

All the sections mentioned above offered lower interest rates on mortgages. The LIHT program offers tax credits to investors to raise money for building and maintaining affordable housing options. The rent should remain affordable for the specified population for at least 30 years. A percentage of the houses in the projects are reserved for low-income families. This percentage can be either of the following two:

• 40% of the houses must be reserved and affordable for those whose income is below 60% of the median income of the area
• 20% of the houses must be reserved and affordable for those whose income is below 50% of the median income of the area


HUD wants to ensure that everyone gets good quality housing. All of the programs mentioned above were launched with this objective in mind. Many of the existing projects are nearing the end of the term or their mortgages have been prepaid. However, there are different ways to preserve the affordable housing status of the projects. The agreements with HUD can be renewed or preservation options can be explored by the residents.


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