Housing Finance Agencies (HFA) Risk Sharing


Under Section 542(c), HUD provides credit enhancement for mortgages for multifamily housing projects whose loans are underwritten, processed, serviced, and disposed of by Housing Finance Agencies (HFA). HUD and the qualified State and local HFAs share in the risk of the mortgage.

General information about this opportunity
Last Known Status
Program Number
Federal Agency/Office
Office of Housing-Federal Housing Commissioner, Department of Housing and Urban Development
Type(s) of Assistance Offered
F - Guaranteed/Insured Loans
Program Accomplishments
Not applicable.
Housing and Community Development Act of 1992, Section 542(c), Public Law 102-550, 12 U.S.C. 1707. HUD's fiscal year 2001 Appropriations Bill amended Section 235 of the Housing and Community Development Act of 1992 to extend the 542 Risk Sharing Program to a permanent multifamily mortgage insurance program., Title 24, Part 266
Who is eligible to apply/benefit from this assistance?
Applicant Eligibility
Eligible mortgagors, who include investors, builders, developers, public entities, and private nonprofit corporations or associations, may apply to a qualified HFA.
Beneficiary Eligibility
Individuals, families, and property owners may be eligible for affordable housing.
Documentation regarding the characteristics of the property and the qualifications of the mortgagor are submitted with the application to a qualified HFA. Proof of nonprofit status is required of nonprofit organizations. Projects must qualify as affordable housing as defined by Section 42(g) of the Internal Revenue Code of 1986.
What is the process for applying and being award this assistance?
Pre-Application Procedure
Preapplication coordination is required. An environmental impact assessment is required for this listing. This program is eligible for coverage under E.O. 12372, "Intergovernmental Review of Federal Programs." An applicant should consult the office or official designated as the single point of contact in his or her State for more information on the process the State requires to be followed in applying for assistance, if the State has selected the program for review. To obtain mortgage insurance, a potential borrower should consult a HUD-approved HFA as the single point of contact for additional information regarding the process. The lender on behalf of the borrower then submits an application directly to the HFA. The HFA obtains specific approvals from the local HUD Multifamily Hub or Program Center on previous participation and environmental assessments.
Application Procedure
2 CFR 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards applies to this program. An applicant submits a formal application directly to a HUD-approved HFA.
Award Procedure
The HFAs are vested with the maximum amount of processing responsibilities and decision-making to approve or reject individual projects. However, HUD retains authority for environmental review. The HUD-approved HFA is responsible for making the award once the project qualifies for mortgage insurance.
Not applicable.
Approval/Disapproval Decision Time
Not applicable.
Not applicable.
Not applicable.
How are proposals selected?
Not applicable.
How may assistance be used?
Participating qualified State and local Housing Finance Agencies (HFAs) may underwrite, originate, service, and dispose of properties financed under Section 542(c). Program provides full HUD mortgage insurance to enhance HFA bonds to investment grade. HFA reimburses HUD in the event of a claim pursuant to terms of Risk Sharing Agreement. HFAs may elect to share risk with HUD from 10 to 90 percent of the loss. The program provides new independent insurance authority not under the National Housing Act.
What are the requirements after being awarded this opportunity?
Not applicable.
The Department of Housing and Urban Development reserves the right to audit the accounts of the HFA and the mortgagor in order to determine their compliance and conformance with HUD regulations and standards.
HFAs are required to service and maintain records in accordance with acceptable mortgage practices of prudent lending institutions and the implementing regulations. HFAs must also monitor construction/inspection process.
Other Assistance Considerations
Formula and Matching Requirements
Statutory Formula: Title 24 Part 266

Matching requirements are not applicable to this assistance listing.

MOE requirements are not applicable to this assistance listing.
Length and Time Phasing of Assistance
No Over the life of the insured mortgage
Who do I contact about this opportunity?
Regional or Local Office
Persons are encouraged to communicate with the nearest local Multifamily Regional Centers and Satellite Offices listed at:https://www.hud.gov/program_offices/housing/mfh/hsgmfbus/abouthubspcs
Headquarters Office
Carmelita James
451 Seventh Street SW
washington, DC 20410 US
Phone: (202) 402-2579
Website Address
Financial Information
Account Identification
(Guaranteed/Insured Loans) FY 22 FY 23 FY 24 FY 21$631,256,806.00; FY 20$1,003,857,207.00; FY 19$253,000,000.00; FY 16 est $430,586,683.00; FY 14 est $325,000,000.00; FY 17 est $458,350,159.00; FY 13$355,000,000.00; FY 15$409,997,152.00; - Reported under 14.134
Range and Average of Financial Assistance
Not applicable/available.
Regulations, Guidelines and Literature
The regulatory authority for this program is regulation 24 CFR Part 266.
Examples of Funded Projects
Not applicable.


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