Home / Press Room / Press Releases / HUD No. 24-042

HUD No. 24-042
HUD Public Affairs
(202) 708-0685
February 29, 2024

HUD and Treasury Extend Initiative to Finance the Construction and Rehabilitation of Affordable Rental Homes for Low-Income Families

Extension of risk-sharing initiative will create or rehabilitate more than 38,000 new rental homes over the next 10 years for low-income families, seniors, and persons with disabilities.

WASHINGTON - Today, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of the Treasury (Treasury) announced that they will indefinitely extend the Section 542(c) Housing Finance Agency Risk-Sharing Initiative offered through HUD’s Federal Housing Administration (FHA) and Treasury’s Federal Financing Bank (FFB). The Risk Sharing Initiative provides a critical source of cost-effective capital for state and local housing finance agencies (HFAs) that supports the creation and preservation of high quality, affordable rental homes, and its extension will allow even more HFAs to participate in this important program.

Since the Biden-Harris Administration re-started the Risk Sharing Initiative in 2021, the program has already enabled access to nearly $2 billion in financing for the development or substantial rehabilitation of almost 12,000 affordable rental homes for low-income families, seniors, and persons with disabilities. FHA anticipates that approximately 38,000 additional affordable rental homes will be created or preserved through the initiative over the next ten years alone.

“Simply put, the supply of housing has not kept pace with increasing demand, making housing too expensive for far too many people. HUD is using every single tool we have to ensure the families we serve can access affordable homes,” said HUD Deputy Secretary Adrianne Todman. “Today’s announcement means that, together with our partners at the Department of the Treasury, HUD will be able to continue providing the capital needed to build and preserve tens of thousands of rental units for the families who need our help.”

“Today’s announcement will build on the significant progress President Biden’s Investing in America agenda has made in expanding access to affordable housing and improving housing stability across the country,” said Deputy Secretary of the Treasury Wally Adeyemo.

“The state and local housing finance agencies participating in this program have demonstrated that it can be a crucial source of financing to create and preserve much-needed affordable rental homes,” said Ethan Handelman, Deputy Assistant Secretary for Multifamily Housing Programs. “We’re pleased to have the opportunity to continue partnering with the Department of the Treasury to increase the nation’s affordable housing supply.”

Through the Risk Sharing Initiative, eligible state and local housing finance agencies receive credit enhancement through FHA mortgage insurance and the Federal Financing Bank purchases the FHA-insured mortgages. The initiative was previously set to cease accepting applications in September 2024, but today’s agreement provides a pathway for housing finance agencies to continue to submit applications to FHA for mortgage insurance on an ongoing basis.

About the Section 542(c) Housing Finance Agency Risk-Sharing Initiative with the Federal Financing Bank

The Section 542(c) Housing Finance Agency Risk-Sharing Initiative allows eligible Housing Finance Agencies (HFAs) to enter into contracts with HUD through which FHA insures multifamily mortgages originated by an HFA that are used to finance construction or rehabilitation of properties with affordable housing units. Under these contracts, HUD and the HFA share the risk of any potential loss resulting from a default of the insured mortgage. With the FHA insurance credit enhancement in place, the Federal Financing Bank will purchase the mortgage, enabling the HFA to recoup their capital and make other investments in their communities.


HUD's mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
More information about HUD and its programs is available at www.hud.gov and https://espanol.hud.gov.

You can also connect with HUD on social media and follow Secretary Fudge on Twitter and Facebook or sign up for news alerts on HUD's Email List.

HUD COVID-19 Resources and Fact Sheets

Learn More About HUD's Property Appraisal and Valuation Equity Work