HUD/FHA
HUD/FHA has created Three dynamic programs. HUD 223 (f) was created for the acquisition, refinancing of multifamily properties, whereas HUD 221(d)(4) was designed to ensure multifamily developers to build market rate, low-income and rental assistance along with other multifamily developments including major rehabs. HUD 223 (a)(7) loan is exclusively for the refinancing of existing HUD debt on Multifamily and healthcare properties.
HUD 223 (f) General highlights
Purpose: Acquisition or refinancing of multifamily properties
Loan Amount: Range from $2 to $100 million.
Type of Assistance: FHA Mortgage Insurance for HUD
Term: Up to 35 years.
Rate structure: Fixed-rate, Fully amortized.
Benefits: Additional benefits for affordable properties include increased LTV allowances, reduced DSCR, lower mortgage insurance premium (MIP). It is a great fit when it is combined with the low-income Housing Tax Credit (LIHTC) program.
Additional Benefits: Great with the Rental Assistance Demonstration (RAD) program which allows properties using HUD legacy housing assistance program to convert properties to long term section 8 HAP.
HUD 221 (d) (4) General Highlights
Summary: S221(d)(4) loans are designed to insure mortgage loans to facilitate the new construction or substantial rehabilitation of multifamily rental or cooperative housing for moderate-income families, elderly, and the handicapped. Single Room Occupancy (SRO) projects may also be insured under this section.
Purpose: The importance of this loan is to insure lenders against loss on mortgage defaults which it creates additional guarantees for lenders to pool from their capital to lend to developers. Also, another benefit if this program is that it assists private industry in the construction or rehabilitation of rental and cooperative housing for moderate-income and displaced families by making capital more readily available. The program allows for long-term mortgages (up to 40 years) that can be financed with Government National Mortgage Association (GNMA) Mortgage Backed Securities.
Loan Amount: $2 to $100 million
Term: Up to 40 years
Eligible Borrowers: private, public, profit-motivated sponsors, limited distribution entities, non-profit cooperatives, builder-seller, investor-sponsor, and general mortgagors.
Rate Structure: fixed rate. Plus, up to 3 additional years during the construction period.
