Freddie Mac HUD Section 8 Financing

Financing for Section 8 Housing Assistance Program Project-Based Contract or Tenant-Based Voucher Properties insured by Freddie Mac

Section 8 properties can be both challenging and incredibly financially rewarding for the investors who own and operate them -- and for any investor or developer who's interested in expanding their portfolio of affordable properties, a Freddie Mac HUD Section 8 Loan could be the perfect financing solution. Freddie Mac's HUD Section 8 loan program offers loan terms between 10 and 30 years for LIHTC properties, and loan terms between 5 and15 years for non-LIHTC properties. In addition, these unique loans have maximum LTV allowances of up to 90% (wow!) and minimum DSCR requirements of as low as 1.15x for LIHTC properties. Non-LIHTC properties are allowed up to 80% maximum LTV, and as low as 1.20x for DSCR requirements. Freddie Mac HUD Section 8 Loans are non-recourse and are available for eligible mixed-use properties.


2021 Sample Freddie Mac Terms For HUD Section 8 Loans

Size:  Varies

Terms:  5-year minimum, 15-year maximum for cash loans, 10-year minimum, 30-year maximum for tax-exempt financing 

Amortization:  Up to 30 years for cash loans, up to 35 years for tax-exempt financing

Maximum LTV: 80% for non-Low-Income Housing Tax Credit (LIHTC) properties, 90% for LIHTC properties

Minimum DSCR:

  • Properties with Section 8 Housing Assistance Program (HAP) contracts in above-average markets, with physical vacancies of 5% or less: 1.20x

  • Properties with new LIHTC credits: 1.15x

  • Some excess rent may be underwritten for above-market long-term LIHTC contracts

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