Abstract
Attention has been increasingly focused on multifamily rental properties insured by the Federal Housing Administration (FHA) that have fallen into default and had their mortgages assigned to the U.S. Department of Housing and Urban Development (HUD), in many cases leading to HUD's taking outright possession before reselling the property to a private owner. A fiscal and policy crisis has arisen around both the net costs of foreclosure to the FHA insurance fund itself and the lack of discretionary subsidy funds to assist all the eligible tenants in the large number of eligible properties. This article takes the point of view that improvements need to be made in the way these properties are monitored by HUD and in the flexibility given HUD in assisting owners of troubled properties to avoid foreclosure.1