Examination of Alternative FHA Mortgage Insurance Programs for Financing Single-Family Rental and Small Multifamily Rental Properties

Abstract

More than one-half of all rentals are in single-family properties (those containing from 1 to 4 units). Although these properties are generally financed through the single-family mortgage market, investors’ financing options are more limited than those of owner-occupants. Small multifamily properties also make up a large share of and play an important role in the rental market. They comprise nearly one-third of all unsubsidized rental housing and are more likely than larger properties to serve lower income households. Despite this fact, gaps in financing for small multifamily properties — often defined as those having from 5 to 49 units — have long been identified.