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BK-0910597
Under section 223 (f) of the National Housing Act, the FHA provides mortgage insurance for the refinance, acquisition, and moderate rehabilitation of existing multifamily rental properties. Insured loans may be utilized to directly fund the payoff, acquisition, and repair costs, or may be utilized as substitute credit enhancement for tax-exempt revenue bonds, providing a AAA rating
(For a Printable PDF of this program, please click here)
Eligibility For acquisition/refinance and moderate rehabilitation of multifamily properties that are at least 3 years old. Both LIHTC and market rate properties are eligible
Loan Amounts No maximum
Term/Amortization Up to 35 year term. All loans fully amortizing
Interest Rate Fixed rate for the permanent loan are established after issuance of a firm commitment by HUD based upon the current market conditions. Call for current rates
Debt service coverage ratio 1.17x minimum
Loan to value Acquisition-85% maximum (standard, based on purchase price + transaction cost) Refinance-85% maximum (cash out)
Personal recourse Non-recourse
Prepayment If loan converts to a Ginnie Mae MBS, a 5 year lock-out period then a declining prepay schedule normally applies (5%, 4%, 3%, ETC..) but alternate lock-out and prepayment options are available
Financing Fee Negotiable and competitive
Permanent Loan Fee Negotiable and competitive
Mortgage Insurance Premium 1% for the first year (payable at closing), .5% per year thereafter
Due Diligence Fee Fee includes cost of appraisal, phase I environmental, physical needs assessment, and lender due diligence. Borrower is responsible for legal fees and customary closing costs. All due diligence fees are refundable at closing
Venture Placement Fee 1% to 2% dependent on property