To mortgage low-cost rental housing, secure government-backed financing through programs like the U.S. Department of Housing and Urban Development (HUD) Section 8 or the Federal Housing Administration (FHA). Calculate debt service ratios to ensure affordability, partner with conventional lenders for private loans, and leverage tax incentives such as the Low-Income Housing Tax Credit (LIHTC).

Government programs reduce risk and offer favorable terms, while conventional lenders provide flexible loan structures. For example, HUD’s Section 8 program funds rental housing for income-qualified tenants, with 2023 data showing it supports over 1.2 million units nationwide. The LIHTC, established by the Internal Revenue Service, offers 9% annual tax credits for developments serving low-income residents, attracting private investment. According to the National Low Income Housing Coalition, 6.8 million U.S. households face severe housing affordability challenges, underscoring demand for low-cost rental options. Fannie Mae’s 2023 Selling Guide mandates a maximum 45% debt-to-income ratio for multifamily loans, ensuring lenders prioritize sustainable projects. Combining these strategies addresses both regulatory compliance and market needs, driving scalable solutions to housing shortages.