August 21, 2019
Ben Carson, U.S. Housing and Urban Development (HUD), has made it clear that he would like to see more development going on within Opportunity Zones. To that end, Carson recently announced that the Federal Housing Administration (FHA) would begin to insure mortgages on mixed-use developments, under the agency’s Section 220 Program. This will impact thousands of lower-income communities across the United States — as well as federally-designated Opportunity Zones.
“By expanding this program’s reach, we hope to significantly boost private investment in Opportunity Zones and generate growth in development in neighborhoods that need it most,” Carson said, in a speech at an August 2019 Opportunity Zone Expo in Brooklyn, NY. “With expanded mixed-used development in Opportunity Zones comes economic revitalization and job growth, which is just what the doctor ordered for residents living in these communities.”
The FHA’s Section 200 Program insures mortgage lenders against potential loss, should a mortgage default. The program, historically, has been used to finance quality rental housing in downtown urban areas targeted for overall revitalization. Carson’s announcement expanded eligibility of mortgages under the program to all 8,764 federally designated Opportunity Zones throughout the United States.
Lamar Seats, HUD’s Deputy Assistant Secretary for Multifamily Housing, said, “We believe that the inclusion of all Opportunity Zones under the Section 220 program will promote more economic activity, both commercial and residential, in low-income, economically-distressed areas that have not experienced a great deal of growth in recent years,” said Lamar Seats, HUD’s Deputy Assistant Secretary for Multifamily Housing. “Our hope is this will encourage increased lending in regions where affordable housing is most needed.”
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