FHA HUD 223(F)
MAXIMUM LOAN IS THE LESSOR OF:
HUD APPRAISED VALUE OR ACQUISITION COST MULTIPLIED BY
90% LTV of projects with 90% project based rental assistance
87% LTV of affordable housing transactions, with rents at least 10% below market.
85% LTV for market rate deals, or tax credit transactions without a significant rent advantage.
DEBT SERVICE COVERAGE
1.11 or 90% NOI for projects with 90% project based rental assistance
1.15 or 87% NOI for affordable housing transactions, with rents at least 10% below market.
1.1765x or 85% NOI for market rate deals, or tax credit transactions without a significant rent advantage.
FHA PER UNIT STATUTORY LIMIT
Section 207 statutory per unit limits, adjusted by the local Field Office high cost percentage for the locality
COST TO REFINANCE OR CASH-OUT
The greater of the cost to refinance or 80% of HUD appraised value
If transaction provides cash-out, 50% of the cash out proceeds will be held in escrow and released upon completion of all identified critical and non-critical repairs
HUD APPLICATION FEES
$3 per thousand of requested mortgage amount
MORTGAGE INSURANCE PREMIUM
The MIP varies based on transaction type between 0.25% and 0.60%.
TYPICAL PROCESSING STEPS
- Concept meeting with HUD
- Firm Application submitted – will include, but not limited to:
- Final appraisal • Property capital needs assessment
- Phase I environmental site assessment
- Financials and/or credit information on sponsors and management company
- Three years of tax returns for the project or borrowing entity
- Property financial statement that is reviewed by an independent third-party CPA. The multifamily hub director may grant a waiver of this requirement for acquisitions
- Past due accounts payable and outstanding liability
- Verified working capital sufficient to meet all closing requirements
- Management documents
- Evidence of site control/last arms length transaction
- Legal documents (organizational docs, title) • Rent rolls (last 6 months with 85% or above occupancy)
Project must comply with the specified HUD, state and local standards
Loans in excess of $75 million will be subject to additional underwriting criteria.
Energy Audit and Utility Consumption data
THIRD PARTY COSTS
Lender collects initial deposit of $25,000
Borrower responsible for any additional third party costs