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The rise in loans for multifamily units reflects an underlying trend in demand for rental property. The FHA has endorsed nearly 1,100 multifamily loans this fiscal year, which runs until October 1, more than seven times the amount it backed three years ago. For the second time, loan activity exceeded $10 billion. "FHA has never been more relevant in making sure the multifamily apartment marketplace continues to function even during these tough economic times," Carol Galante, FHA's acting commissioner, said in a statement. The Commerce Department reported last week that while housing starts slipped 1.5 percent in July to a seasonally adjusted annual rate of 604,000 units, starts on multifamily housing, often used for rentals, rose 7.8 percent to 179,000 units.

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