FHA to Insure Opportunity Zones’ Mixed-Use Development
WASHINGTON – To stimulate greater multifamily residential and commercial development in Opportunity Zones, the Department of Housing and Urban Development (HUD) will insure Federal Housing Administration (FHA) mortgages for mixed-use development. HUD says it falls under its Section 220 Program and applies in thousands of lower-income communities across the U.S.
Speaking at an Opportunity Zone Expo in Brooklyn, New York, HUD Secretary Ben Carson said FHA can be a key partner for developers looking to invest in Opportunity Zones.
“By expanding this program’s reach, we hope to significantly boost private investment in Opportunity Zones and generate growth in development in neighborhoods that need it most,” said Carson. “With expanded mixed-used development in Opportunity Zones comes economic revitalization and job growth.”
“We believe that the inclusion of all Opportunity Zones under the Section 220 program will promote more economic activity, both commercial and residential, in low-income, economically distressed areas that have not experienced a great deal of growth in recent years,” added Lamar Seats, HUD’s Deputy Assistant Secretary for Multifamily Housing. “Our hope is this will encourage increased lending in regions where affordable housing is most needed.”
FHA’s Section 220 Program insures lenders against loss on mortgage default. Historically, Section 220 has provided good quality rental housing in downtown urban areas that have been targeted for overall revitalization. This latest announcement expands eligibility of FHA mortgage insurance to all 8,764 Opportunity Zones, including those located in rural areas.
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