All types of housing are seeing positive changes in the United States. This includes multifamily properties, which include apartment buildings. Recently, economic changes have been made for multifamily mortgages. Multifamily mortgages are extended for properties that have space for four or more families. On April 1, 2016, multifamily mortgages will see insurance rate cuts instituted by the Federal Housing Administration. The reduction is said to encourage capital financing of affordable and energy-efficient apartments.
According to Florida Realtors, the FHA estimates that multifamily insurance rate reductions will spur the rehabilitation of an additional 12,000 units of affordable housing per year nationally. If that occurs, the FHA expects nearly 40,000 families could benefit over the next three years.
“Families across the country are struggling through an affordable housing crisis,” said Secretary Julian Castro of the Department of Housing and Urban Development. “By reducing our rates, this Administration is taking a significant step to encourage the preservation and development of affordable and energy efficient housing in communities large and small. This way, hard-working families won’t have to make the false choice between quality or affordable housing.”
Castro decided to make these changes and cuts after seeing an affordable housing complex in Ohio.
The new cuts for multifamily mortgages include reductions for energy-efficient properties that are committed to industry recognized green building standards, broadly affordable housing under Section 8 contract and/or covered by Low Income Housing Tax Credit, and affordable mixed-income properties that set-aside units based on affordability including partial LIHTC, partial section 8, inclusionary zoning, or other local affordability requirements.
The FHA’s cuts should benefit both affordable housing and energy-efficient, green properties. The exact insurance premiums for multifamily mortgages can be found here.
If you are interested in apartment buildings in Miami and have questions about these changes, reach out to one of our expert agents at RE/MAX Paradise today.