Posted by DNerland on November 27, 1999 at 10:54:02:
I was wondering whether any readers out there have had experience with a HUD multifamily property. I am looking at a HUD property with 188 units. The rents seem high to me for what I know to be comparable rents in the area.
It is my understanding that HUD Section 8 program for Multifamily properties has changed significantly over the last few years where long-term contracts with HUD are no long possible for investors in Multifamily projects. Instead HUD is now renewing contracts with investors on an annual basis only.
I called the local HUD office and was told that the particular project I am considering has already gone throught the mark to market program and that the rents on this property would NOT be adjusted downward. I am concerned that since I cannot sign a long-term contract with HUD to keep the property Section 8 that the investment is pretty risky despite assurances from HUD that the program is not going anywhere. HUD tells me that the annual renewals are being done so as not to inflate budget deficits (Congress is sensitive about this and it is all funny money anyway)
Any thoughts out there from those experienced with HUD Section 8 multifamily properties???