Key facts
- Build-to-rent communities now qualify for FHA-insured multifamily financing.
- HUD's change expands access to capital with lower costs and longer terms.
- Properties must consist of at least five dwelling units in a cohesive rental community.
- Section 221(d)(4) offers up to 43 years of fixed-rate financing for new construction.
- Section 223(f) provides up to 35 years of fixed-rate financing for existing properties.
The U.S. Department of Housing and Urban Development (HUD) has announced that build-to-rent (BTR) communities will now be eligible for financing insured by the Federal Housing Administration (FHA) through its multifamily mortgage insurance programs. This development provides a new, potentially lower-cost and longer-term capital stream for BTR developers and acquirers for new construction, acquisitions, and refinancing.
The FHA financing, detailed in HUD's Mortgagee Letter 2026-12, requires BTR properties to be cohesive rental communities with at least five dwelling units, including single-family homes, duplexes, and triplexes. The available programs are Section 221(d)(4) for new construction, offering up to 43 years of fixed-rate financing, and Section 223(f) for acquisition or refinancing of recently developed properties, providing up to 35 years of fixed-rate financing.
This move comes after the passage of the 21st Century ROAD to Housing Act, which addressed legislative uncertainty surrounding institutional investors in the BTR sector. HUD's decision signals a view of BTR as a critical part of the nation's housing supply, comparable to traditional multifamily housing.