What HUD’s New Build-to-Rent Policy Means for You
Rental homes have a new path to federal financing. On October 14, HUD announced that FHA-insured loans are now open to Build to Rent communities, which are rental properties made up of single-family homes, duplexes, or triplexes. If you develop, own, or manage rental housing, here is what changed and what it could mean for you.
What is a Build to Rent community?
Think of a neighborhood of small rental homes under one owner and manager, instead of one apartment building. HUD says these can include both site-built and manufactured homes.
What changes
The update takes effect immediately. These properties will now be treated under the same terms and conditions as traditional multifamily rental developments. The two programs are Section 221(d)(4) for new construction and Section 223(f) for buying or refinancing recently developed rental communities.
What it means for you
Developers: A new type of rental project can now use FHA-insured financing.
Owners and managers: More small-home rental communities may be built in your market, and they could compete for renters in your area.
Manufactured housing: HUD ties this change to its work on manufactured housing, including removing the chassis requirement in its manufactured housing programs.
What to keep in mind
Projects must still meet the specific requirements in HUD’s Mortgagee Letter. Read it before assuming a project qualifies.
Read the Full Announcement