| The Federal Housing Administration (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.
The benefits of this program include:
- Loan terms of up to 35 years fully amortizing
- No rent restrictions
- No affordable leasing requirements
- Extremely low fixed rate
- AAA credit enhancement for tax-exempt bond financed transactions,
and eligibility for securitization by Ginnie Mae
- Non-recourse
- Higher loan-to-value ratios
- Lower debt service coverage
- May include commercial/retail space
- Repair work included in the loan amount
To qualify under Section 223(f), three years must have passed from
the property’s completion of construction or its last substantial
rehabilitation.
The unique demands and processes of HUD/FHA multifamily financing
are generously offset by the advantages. Additionally, HUD’s
MAP Program (Multifamily Accelerated Processing) coupled with CMC’s
streamlined internal procedures and staff of FHA experienced professionals
bring greater speed and efficiency to meet your accelerating needs.
Beyond our robust selection of products, CMC’s expertise
and steadfast commitment to remarkable customer service are what
sets us apart from the rest. We can help meet your most critical
financial and timing needs. Personal attention guaranteed.
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Product Overview
Eligibility
For acquisition/refinance and moderate rehabilitation of multifamily
properties that are at least 3 years old. LIHTC, bond and
market rate properties are eligible.
Loan amounts
No maximum
Term/amortization
Up to 35 year term
All loans fully amortizing
Interest rate
Fixed rates 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% of purchase price + transaction cost
Refinance:
85% maximum
80% LTV permitted on cash out
Personal recourse
Non-recourse
Prepayment
Five year lock-out period then a declining prepay schedule
normally applies (5%, 4%, 3%, etc…). Alternate lock-outs
and prepayment options are available.
Mortgage insurance premium
Apartments with or without LIHTC
1.00% for the first year (payable at closing)
0.45% per year thereafter
Minimum occupancy requirement
No minimum but 85% is recommended
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