Mortgage Insurance: HUD’s Risk-Sharing Program and Its Role in Financing Affordable Rental Housing

GAO reports HUD's section 542(c) risk-sharing program, in which state housing finance agencies underwrite loans and share losses with HUD, backed over $12 billion in multifamily loans from 2016 to 2025, helping produce or preserve about 93,670 rental units across 776 projects. Three traditional HUD mortgage insurance programs, where HUD-approved lenders rather than state agencies process applications, each financed more housing than the risk-sharing program did over the same period.

Combined, all four programs financed nearly 1.3 million multifamily units, with the risk-sharing program accounting for just 7% of that total. Unlike the traditional programs, which HUD noted are roughly half market-rate, the risk-sharing program is restricted entirely to affordable housing, and 37 state and local housing finance agencies had been approved to participate as of July 2026.

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