HOC’s success in executing on new construction, renovation and preservation initiatives is made possible by our ability to provide mortgage financing to HOC’s developments through our role as Montgomery County’s designated Housing Finance Agency.  In addition to its own portfolio, HOC is authorized to provide low-interest mortgage financing to private and non-profit developers by issuing tax-exempt bonds. A percentage of these units is set aside for low- and moderate-income households.

Who are we?

The Multifamily Underwriting and Loan Origination Section is responsible for multiple bond issues each year. The proceeds from these bond issues fund mortgages for multifamily rental developments for HOC and its affiliates, as well as for private for-profit and non-profit developers. The Multifamily Underwriting section also administers the FHA Risk Sharing Program, a HFA/FHA insurance program. This section also administers the allocation and utilization of bond cap for housing that is allocated annually to Montgomery County and allows HOC to issue private activity bonds for multifamily developments that are owned by private entities and single family issuances.

The Multifamily Portfolio Management Section monitors the fiscal and physical health of the portfolio to ensure program and tax law compliance for all multifamily developments financed by HOC and that affordability is maintained in compliance with regulatory requirements.

What do we do?

Multifamily Underwriting and Loan Origination

• Underwrite and prepare multifamily developments for tax-exempt or taxable bond, Federal Financing Bank, Ginnie Mae or conventional financing by providing timely reviews and thorough evaluation of loan risk.
• Administer the FHA Risk Sharing Program that provides credit enhancement to worthy developments while minimizing risk to the Commission and FHA.
• Negotiate the refinancing and restructuring of loans that may be otherwise financed by the conventional market rate.
• Evaluate HOC’s bond financed properties and seek opportunities to lower borrowing costs by restructuring the financing.
• Identify additional sources of equity capital and debt for affordable housing.
• Our Multifamily Program Guide for those interested in securing multifamily financing.

FHA Fully-Insured Mortgage Programs

• Utilize the full reach and range of FHA insured loan products (i.e. HUD Sections 542(c), 221(d)(4), 223(f)) for new construction, renovation or the refinancing of multifamily and affordable housing by partnering, where applicable, with FHA approved MAP Lenders that have the capacity to issue taxable GNMAs.
• Depending on the circumstances of the transactions, these programs may have more flexible underwriting requirements than FHA Risk Sharing, allowing our assets to take advantage of larger loans at lower interest rates.
• With HOC’s bond capacity, participate in transactions that combine taxable GNMA sales with short-term, cash backed tax-exempt bonds and 4% Low Income Housing Tax Credits. This participation assists the project by dramatically reducing the long-term borrowing rate and negative arbitrage associated with affordable housing projects financed with FHA insured mortgage loans.

Portfolio Management

• Manage and oversee the Commission’s Multifamily loan portfolio to identify issues and opportunities related to the furtherance of the Commission’s goals.
• Review the multifamily portfolio to ensure program compliance while addressing issues of financial performance, property condition, and market conditions.
• Manage the portfolio to identify adverse trends within the property and intervene to avoid default conditions and to ensure that bond ratings are maintained.
• Provide timely and accurate service while safeguarding the loan portfolio and the related bond issues.
• Maintain a “Watch List” of all properties that are experiencing subpar financial and occupancy performance, or risk refinance and conversion to market rate properties eliminating the affordability component.
• Monitor the rental market trends to identify conditions that could adversely affect the portfolio.
• Our Portfolio Servicing Guide for those interested in understanding how we service our FHA Risk Share multifamily loans.

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