Recently, HUD announced changes to multifamily financing that are anticipated to make a good deal even better. As NREI reported earlier this week, HUD has declared they’ll be permanently relaxing the “three year rule” for multifamily refinancing. We look at what this means, and why HUD is nothing new to BAM in today’s BAM Blog…

According to the NREI piece, which you can read in its entirety here, the new policy will remove the old restriction: previously, a property had to sit or “season” from the certificate of occupancy for three years before it was eligible for a mortgage loan application. Now, that restriction is gone, meaning that real estate investors can apply for long-term HUD financing without waiting for the three-year period to expire. In the NREI article they note in order to take advantage of HUD’s new relaxed borrowing policy, a property must be fully leased, and have sustained occupancy for one month – instead of three years – before applying. As with other HUD financing, the loan time frames are lengthy: borrowers can secure a term loan for up to 35 years.

As we’ve discussed before, HUD and other non-bank lenders like Fannie Mae and Freddie Mac are sources of funding BAM often utilizes – and for good reason. For example, banks typically lock in an interest rate for 5-7 years, possibly longer; however, they charge a high rate to do so! Meanwhile, by using Fannie, Freddie, or HUD a borrower can lock in a rate of 10-15 years. With HUD, 35-40 year rate locks are possible! While some people may associate HUD specifically with low-income properties, they actually offer financing for every asset class including luxury assets.

BAM founder and CEO, Ivan Barratt, has mentioned previously that in order to take advantage of HUD’s financing you have to deal with the red tape and hoops involved; however, once you do the benefits are enormous – and being able to lock in an interest rate for 35 years with a 35-year amortization period takes a lot of risk off the table. A major benefit is that in the event of an economic downturn, you can hold your property and then sell or refinance once the market improves – no selling in a buyer’s market.

Want more info on multifamily investing? Go to and sign up for an account. Once there, under “offerings” you’ll find a free library with articles and videos featuring Ivan and his insider knowledge and insight, as well as a ton of info on BAM, its team, track record, and offerings.