When it comes to building multifamily homes, the right financing can make the project simple and marketable. However, for many building owners and managers, a traditional construction loan may not be the best option. Instead, they may need to pursue different financing options—and HUD financing is a very good way to fund the project. 

HUD Financing Is Not Just for Low-Income Families

HUD loans have a reputation for being used to build multifamily homes designed for individuals receiving government housing assistance or Section 8 assistance. However, that reputation is not entirely accurate. Multifamily homes built specifically for Section 8 and low-income housing are only one aspect of HUD financed properties.

Private property owners can use the loans to build structures that can be rented out at the standard market rate. There are no rent caps or limits stipulated with the loan, and you’re free to build the structure as you see fit as long as it complies with the local building code and HUD guidelines. As long as the project is designed to house multiple families, the Federal Housing Authority can still insure the HUD construction loan to finance the project.

Why Choose a HUD Financing Over Traditional Construction Loans?

Traditional construction loans often have variable interest rates. This means that if general interest rates rise over the years, the interest rate on the loan will do the same. Those monthly payments on the loan may not always be consistent, and if the interest rates keep increasing, you can expect the cost of the payments to increase as well. HUD loans offer loan terms with a fixed rate of amortization, meaning that those monthly payments will never change for the duration of the loan.

At Howell Investment Finance in Ames, IA, their dedicated team understands the complexities of finding the right financing options for multifamily housing projects and commercial ventures. They’ll work with you to understand the goals behind the property, the value it holds, and the development work required to find the best loan possible. Whether you’re interested in HUD financing or want to explore more traditional apartment mortgages, they’ll make sure you understand your options. Learn more about their services online and call (515) 233-8228 to schedule an appointment with an advisor today.