Affordable Housing Building

FHA Risk-Sharing Program - HUD Section 542(b) Mortgages


HUD provides reinsurance on commercial housing properties whose loans are originated, serviced, and underwritten by Qualifying Participating Entities. Section 542(b) encourages the development for affordable housing projects. HUD's mortgage credit enhancements are utilized to enhance the underwriting and production strengths of Fannie Mae Loans, Freddie Mac Loans, and other qualified Federal, State, and local public financial and housing institutions.


Section 542(b) Purpose

This program helps encourage the production of affordable housing projects. The program provides insurance and reinsurance for commercial housing projects whose mortgages are originated, underwritten, serviced, and disposed of by a QPE and/or its approved lenders.

Eligible Uses

The QPE and HUD enter into RiskSharing agreements to implement the program. A QPE or its lender, in turn, makes loans to investors, builders, developers, public entities, and private nonprofit corporations or associations.

Eligible Borrowers

Eligible borrowers include public entities, investors, developers, builders, and private non-profit corporations or associations may apply to a qualified QPE and/or its lender.

FHA Apartment Loans - HUD Multifamily Mortgages