The Federal Housing Administration (FHA) in its landmark policy decision has announced that it will provide long-term multifamily mortgage money. The decision would be in action for at least next six months. Arguably, FHA financing is lot more cheaper than other mortgage sources. It offers fixed rate terms up to 35 years. However, in order to qualify for financing from the agency one has to undergo a procedure under section 223- F.
Proclaiming its new policy the FHA stressed that the ban on insuring loans on apartment properties that haven't been completed and operating for at least three years is being suspended temporarily. Now, after the suspension of ban purchasers and re-financiers of buildings with five or more rental units would be able to obtain FHA insurance.
Section 223-F asks that multifamily program projects must be deemed "fully operating and self sustaining, i.e. the project should be of proven track records of rental income and sound management practices. Formed in the year 1934, the FHA is an agency of the federal government. It insures private loans which are issued for new and existing housing. Also, it approves loans which are meant for home repairs.