The goal of the LMSA program is to minimize defaults on HUD-insured multifamily rental projects by ensuring a reliable income stream. It may be used in conjunction with the Flexible Subsidy program. LMSA is a subprogram of the Section 8 Housing Assistance Payments program, which is a rent subsidy program that helps eligible low-income families obtain decent, safe and sanitary housing. The program is intended to keep projects competitive and extend its economic life. The Direct Lending Program offers low-interest mortgage loans for new construction and for substantial rehabilitation of existing buildings.
Interest rates vary by location with lower rates in distressed areas.
Financing is through the sale of tax-exempt bonds. The program is designed to be used in conjunction with the federal low-income housing tax credit. Owners can then apply for federal low-income housing tax credits on any of the units that meet the criteria. The program also provides training to the participating contractors in the areas of estimating, budgeting, cash management, cost control and financial reporting. LIHF is active in 35 states and provides affordable loans, flexible underwriting and willingness to finance difficult projects.