FHA 236

Definition

The FHA 236 program, established by the Federal Housing Administration, offers a crucial interest-rate subsidy designed to aid property developers and apartment owners, making housing more affordable for low-to-moderate-income families. This subsidy reduces the interest rate on mortgages for qualified multifamily rental properties. The reduced cost is then transferred to tenants by lowering their monthly rents, thereby enhancing housing affordability.

Examples

Case Study: Leland Apartments
- Location: Downtown Miami, Florida
- Details: A historical building was converted into an affordable housing complex using the FHA 236 program. The interest reduction enabled rents lower than market rates, attracting tenants from various income brackets.
Example: Green Acres Complex
- Location: Dallas, Texas
- Details: A newly constructed apartment complex benefited from the FHA 236 program. With the interest savings, the landlord reduced tenants’ rents, providing a more affordable living option in a high-demand area.

Frequently Asked Questions (FAQs)

What are the eligibility criteria for the FHA 236 program?

To be eligible, projects must be multifamily rental properties serving low to moderate-income families. The properties must adhere to FHA standards and meet specific construction and operation criteria.

How does the subsidy impact tenants?

Tenants indirectly benefit from this program through reduced rent costs. The property owner’s interest savings from the subsidized loan must be passed on in the form of lower rents.

Is the FHA 236 program still active?

While the FHA 236 program was more prominent in previous decades, similar subsidy programs exist today under various names and forms. It’s essential to consult the latest government housing resources for currently active programs.

Who administers the FHA 236 program?

The Federal Housing Administration, a part of the U.S. Department of Housing and Urban Development (HUD), administers the FHA 236 program.

Can market-rate tenants benefit from the FHA 236 program?

Typically, only tenants meeting the income criteria set by the program are eligible for the reduced rents. Market-rate tenants do not benefit from these reductions.

HUD (Department of Housing and Urban Development)

The U.S. Department of Housing and Urban Development is responsible for national policies and programs addressing America’s housing needs, improving and developing the nation’s communities, and enforcing fair housing laws.

Section 8

A housing program managed by HUD that provides rental assistance to low-income families, the elderly, and the disabled, helping them to afford decent, safe housing in the private market.

Low-Income Housing Tax Credit (LIHTC)

A program that encourages private sector investment in low-income housing by offering tax credits to developers in exchange for the development, acquisition, and rehabilitation of affordable housing.

Online Resources

References

“HUD Archives: FHA 236.” U.S. Department of Housing and Urban Development.
Bratt, Rachel G., Stone, Michael E., Hartman, Chester. A Right to Housing: Foundation for a New Social Agenda. Temple University Press, 2006.

Suggested Books for Further Studies

Bratt, Rachel G., et al. Affordable Housing and Urban Redevelopment in the United States: Learning from History. Temple University Press.
Schwartz, Alex F. Housing Policy in the United States. Routledge.
Rae, Douglas W. City: Urbanism and Its End. Yale University Press.

Real Estate Basics: FHA 236 Fundamentals Quiz

### The FHA 236 program primarily helps reduce the housing costs for which group? - [ ] High-income families - [ ] Market-rate tenants - [x] Low-to-moderate income families - [ ] Non-resident aliens > **Explanation:** The FHA 236 program is designed to make housing more affordable for low-to-moderate-income families by providing an interest-rate subsidy to apartment owners, which results in reduced rents. ### How do property owners pass on the savings from the FHA 236 program to tenants? - [ ] By providing free utilities - [x] By reducing rents - [ ] By offering maintenance services - [ ] By adding amenities > **Explanation:** The property owners are required to pass on the interest savings from the FHA 236 program to tenants through reduced rents. ### Which organization administers the FHA 236 program? - [ ] Federal Reserve - [ ] Office of Management and Budget - [x] U.S. Department of Housing and Urban Development (HUD) - [ ] Federal Trade Commission > **Explanation:** The FHA 236 program is administered by the U.S. Department of Housing and Urban Development (HUD). ### Can properties built for high-income families qualify for the FHA 236 subsidy? - [ ] Yes, all properties are eligible - [x] No, only multifamily properties targeting low-to-moderate-income families are eligible - [ ] Only partially - [ ] Income levels do not matter > **Explanation:** The FHA 236 program is specifically aimed at multifamily rental properties for low-to-moderate-income families. ### What was a primary goal of the FHA 236 program? - [ ] Increase property owner profits - [ ] Beautify neighborhoods - [x] Provide affordable housing via rent reduction - [ ] Eliminate real estate taxes > **Explanation:** The primary goal of the FHA 236 program was to provide affordable housing by reducing the rent costs for tenants through interest rate subsidies given to property owners. ### Does the FHA 236 program apply to single-family homes? - [ ] Yes - [ ] No, it only applies to commercial properties - [x] No, it specifically targets multifamily rental properties - [ ] Yes, but only if rented out > **Explanation:** The FHA 236 program specifically targets multifamily rental properties to make housing more affordable for multiple families. ### Which government body originally established the FHA 236 program? - [ ] Federal Reserve - [x] Federal Housing Administration (FHA) - [ ] Treasury Department - [ ] Congress > **Explanation:** The Federal Housing Administration (FHA) originally established the FHA 236 program to promote affordable housing. ### Who ultimately benefits from the FHA 236 subsidy? - [ ] Contractors - [ ] Property managers - [x] Tenants - [ ] Bankers > **Explanation:** Tenants ultimately benefit from the FHA 236 subsidy, as it results in lower rents passed down from the property owner. ### Is the interest-rate subsidy from the FHA 236 program meant to increase property desirability? - [x] Yes, by lowering rents and making units more affordable - [ ] No, it does not affect property desirability - [ ] Only in luxury housing markets - [ ] Only for property sales > **Explanation:** By lowering rents and making units more affordable for low-to-moderate-income families, the FHA 236 program increases the desirability of the properties. ### Who should you contact for more information about current housing subsidy programs? - [ ] Local police department - [x] U.S. Department of Housing and Urban Development (HUD) - [ ] Environmental Protection Agency (EPA) - [ ] Small Business Administration (SBA) > **Explanation:** For more information about current housing subsidy programs, you should contact the U.S. Department of Housing and Urban Development (HUD).