Splitting the Risk in Rental Housing

Article Abstract:

Recent legislation and reinterpretation of existing laws have made it possible for mortgage lenders to reduce the risk level when financing multifamily dwellings. Section 223(f) of the National Housing Act permits 'coinsurance' for 'private' lenders. Under this section the United States Department of Housing and Development participates in the coinsurance up to approximately eighty per cent. Another risk splitting option is the tax exempt bond permissible under Section 103(b)4(a) of the Internal Revenue Code. Finally, mortgages may be sold through the Government National Mortgage Association's mortgage backed security program. Financing multifamily rental housing is more complicated than in the past but the increased options significantly reduce the risk which should benefit developers, lenders and those who need housing. A chart is included.

Analysis, Laws, regulations and rules, Risk (Economics), Mortgages, Coinsurance

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A Syndication that Converts a Condo to Rental

Article Abstract:

An investment in a failed condominium project can sometimes be salvaged most advantageously by selling it to a limited partnership to use as rental property. The developer is freed of his financial obligation and offers the investors a tax advantage. Some factors to consider before making a decision are identified. An example of a tax advantaged syndication is given. A table shows lender's and investors' benefits from hypothetical syndication. Other tables show comparisons of results of selling the syndicated property if it performs as expected versus a forced sale. If properly handled, all parties concerned do well.

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Project turnaround through rental counseling

Article Abstract:

HUD institutes new program of rental counseling for troubled housing projects - use of viability index to determine projects for program.

Dwelling operators, exc. apartments, Housing programs, Models, Services, Public housing, United States. Department of Housing and Urban Development

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