To determine if affordable housing can be mortgaged, assess whether the property meets federal, state, or local income and occupancy restrictions, complies with building codes, and aligns with lender criteria for repayment capacity and property value. Lenders typically require the housing to be classified as "affordable" by a recognized program (e.g., Section 8, USDA Rural Housing) and verify the borrower’s income does not exceed area median limits. Additionally, the property must appraise at a value that justifies the loan amount, and the mortgage must satisfy secondary market guidelines (e.g., conforming to Fannie Mae or Freddie Mac standards).

Affordable housing is mortgage-eligible if it satisfies regulatory and financial thresholds. For example, the U.S. Department of Housing and Urban Development (HUD) reports that 1.2 million affordable housing units were supported by federal programs in 2022, with 65% requiring mortgage compliance for investor or owner-occupancy. Lenders like Fannie Mae permit mortgages for properties with 10–30% below area median income (AMI) limits, provided the borrower’s debt-to-income ratio (DTI) is below 43% and the property passes a 100% loan-to-value (LTV) review. Data from the Federal Housing Finance Agency (FHFA) shows that 22% of multifamily loans in 2023 were for affordable housing, driven by tax credits and lower interest rates. However, challenges persist: only 35% of eligible applicants secure mortgages due to strict underwriting and limited lender incentives. Thus, combining program designation, property viability, and borrower qualification is critical for mortgage approval.