FHA HUD 223(A)(7)
Refinance existing FHA insured multifamily and healthcare properties to reduce the interest rate and provide for minor repairs as required.
MAXIMUM LOAN IS THE LESSOR OF:
The original principal amount of the existing insured mortgage amount
The unpaid principal balance of the existing insured mortgage amount plus:
(a) Transaction costs
(b) Outstanding debt incurred in connection with capital improvements made to the property
(c) All costs associated with the testing, abatement, or removal of lead-based paint
(d) Repairs are limited to $1,500 per unit, plus the cost of accessibility upgrades (non-waivable)
The amount that can be supported by 90% of the net income capitalized by the loan constant (1.11xDSC); 95% of NOI and 1.05x DSCR (90% or more units covered by project based section 8 contract)
HUD APPLICATION FEES
Borrower is responsible for the 0.15% application fee. This fee and all other closing costs are mortgagable.
OTHER PROGRAM FEATURES
FHA insurance provides credit enhancement for tax-exempt bond financing
Simplified underwriting and processing procedures assure rapid commitment processing
No equity takeout is permitted; existing reserves may only be used for CNA report and balance stays with project.
110 percent repair escrow required for non-critical repairs as identified by PCNA
Prepayment penalties and Defeasance costs which do not exceed 10% of the loan amount are financeable
Past due accounts payable and outstanding liabilities for project operating expenses must be cleared and released, or otherwise fully satisfied, prior to or at loan closing.
Cash required at closing for the portion of the costs not covered by the new mortgage amount.
Energy Audit and Utility Consumption data
THIRD PARTY COSTS
Lender collects initial deposit of $2,500
Borrower responsible for any additional third party costs