With housing across the nation at a premium, creating new and affordable housing options is vital for every community. Unfortunately, for many landlords and construction teams, acquiring the financing for these projects can seem like a daunting feat. However, with HUD financing, getting the funds you need to create a new apartment complex or multi-family structure is relatively simple. At Howell Investment Finance in Ames, IA, their construction loan specialists want to help. Here, they explain what HUD financing is and why it’s important.

What Is HUD Financing?

HUD financing is a low-interest loan designed to help create affordable multi-family structures and alleviate the housing crisis. These loans are managed by the government and are backed by the value of the property. This means, should the loan-holder default on the mortgage after securing financing for their construction project, only the property itself can be seized. HUD construction loans allow landlords to enter the industry with relatively low risk and lower payments than would be possible through traditional construction loans and mortgages.

Why It Matters

As cities grow, the demand for quality housing increases. Without new construction, many areas struggle to supply an adequate number of housing options for people moving into the area. While this can increase rent, temporarily boosting landlords’ incomes, it often has a negative impact on the area in the long term. If individuals cannot afford housing, they’ll move away, decreasing the number of actively hiring business and damaging the local economy.

Building new structures to keep up with the housing demand is the only way to maintain growth in the area. However, traditional multi-family construction loans carry with them high interest rates, collateral requirements, and complicated qualification standards. HUD loans allow construction to happen without placing an undue burden on up-and-coming landlords, helping them keep their rents lower and more appealing to potential tenants.

If you’re looking to build or renovate a multi-family home, contact Howell Investment Finance in Des Moines to discuss HUD financing for your project. Their dedicated loan specialists will help you find the funding you need to get your unit built quickly. Visit their website for more information on their available construction loan types and call (515) 233-8228 to schedule a consultation today.