Mortgage lenders can now release some funds before all borrower money is in

The US Housing and Urban Development Department (HUD) changed a rule for multifamily mortgages. Lenders can now disburse up to 1% of the mortgage amount before requiring all of the borrower's own funds to be fully disbursed. This change removes a complicated step for lenders when they package mortgages into government-backed securities.

This small change makes it easier for lenders to bundle multifamily mortgages into securities guaranteed by the Government National Mortgage Association (Ginnie Mae). Before, lenders had to wait for all borrower funds to be disbursed, which created extra steps and delays. Now, they can move faster, potentially speeding up the process for new multifamily housing projects.