Freddie Mac Financing for HUD Section 8 Multifamily Properties

Freddie Mac Insured Loans for Section 8 Housing Assistance Program Project-Based Contract or Tenant-Based Voucher Properties 

Owning and operating Section 8 properties can be both challenging and incredibly financially rewarding-- and, if you're an investor or developer who's ready to expand your portfolio of affordable properties, a Freddie Mac HUD Section 8 Loan could be the perfect solution. Freddie Mac's HUD Section 8 financing program offers 10-30 year loan terms for LIHTC properties, and 5-15 year loan terms for non-LIHTC properties. Plus, these loans have maximum LTV allowances of up to 90% and minimum DSCR requirements of as low as 1.15x (for LIHTC properties), and up to 80% maximum LTV allowances and as low as 1.20x DSCR (for non-LIHTC properties.) Freddie Mac HUD Section 8 Loans are also non-recourse and are available for eligible mixed-use properties. 

To learn more, check out Freddie Mac’s official HUD Section 8 Financing Product Sheet or keep reading below for an in-depth explanation of the Freddie Mac HUD Section 8 Loan program.

Sample Freddie Mac Terms For HUD Section 8 Loans

Size:  Varies

Terms:  5-year minimum, 15-year maximum for cash loans, 10-year minimum, 30-year maximum for tax-exempt financing 

Amortization:  Up to 30 years for cash loans, up to 35 years for tax-exempt financing

Maximum LTV: 80% for non-Low-Income Housing Tax Credit (LIHTC) properties, 90% for LIHTC properties

Minimum DSCR: 

  • Properties with Section 8 Housing Assistance Program (HAP) contracts in above average markets, with physical vacancies of 5% or less: 1.20x

  • Properties with new LIHTC credits: 1.15x

  • Some excess rent may be underwritten for above market long-term LIHTC contracts

Prepayment Options:  Defeasance for non-LIHTC properties, yield maintenance for LIHTC properties

Eligible Borrowers:  Need previous Section 8 ownership/management experience 

Eligible Properties: High-rise properties, mid-rise properties, and garden apartment properties. Must have a Section 8 project-based contract or voucher. 


  • Cash loans with Section 8 project-based contracts: Targeted Affordable Housing (TAH) and Freddie Mac Multifamily Approved Conventional Sellers

  • Cash loans with Section 8 tenant based vouchers: Freddie Mac Multifamily Approved Conventional Sellers

  • Tax-exempt financing: TAH Sellers only

Section 8 Subsidies: 

Eligible Section 8 subsidies include: 

  • Project-based subsidies: Rental assistance tied to a specific property. Properties get cash payments determined by the number of tenants living in eligible units.

  • Tenant Based subsidies: Rental assistance tied to a specific tenant, not a specific property. Properties get cash payments determined by the number of qualifying occupants-- i.e. those with vouchers. Vouchers include:

    • Regular vouchers: Most vouchers are regular vouchers, which limit payments to HUD's fair market rent in the particular area where the property is located.

    • Enhanced vouchers: Enhanced Section 8 vouchers are provided to tenants living in properties that used to receive project-based subsidies, including properties where the owner has either determined to leave the Section 8 program, or has prepaid their government-insured mortgage. For tenants living in these properties, enhanced vouchers help them pay for rent increases-- which means these vouchers are typically based on the actual rent of the property.

Subordinate Financing:  Permitted with additional requirements and analysis


  • Very competitive interest rates

  • Loans are non-recourse

  • Certain mixed-use properties are eligible


  • Typically requires third-party reports, including appraisal, Phase I Environmental Assessment, and physical condition assessment

  • Requires application fees, commitment fees, and other fees