Multifamily and Mixed Use Cash Outs, Refinance and Acquisition
FHA / HUD section 223 (F)
* 5.75% + Fixed (our fee built into the interest rate)
* 1% mortgage insurance premium at closing then 0.6% annually on decreasing loan amount
* Term: Up to 35 years fully amortizing
* $5M to 100 million +* No upfront fees. We are paid when your loan is funded at closing
* Eligible properties: market rate properties of any class, co-operatives, affordable or subsidized housing. Construction or substantial rehab completed 3 + years before application to HUD; student housing allowable but cash flows cannot assume multiple rents from one unit and rents must be in line with market rate multifamily comparables.
* Subsidized: (at least 90% Section 8): 87% LTV, 1.11X DSCR, 90% acquisition to cost & 80% cash out.
* Affordable: (with minimum set-aside 15 + years): 90% LTV, 1.15 DSCR, 87% acquisition to cost & 80% cash-out.
* Market Rate: 85% LTV, 1.18X DSCR, 85% acquisition to cost & 80% cash out
* Repair and rehab limitations: up to $15,000 times local cost factor (190% to 270%; repairs not 50% = of two building systems; electrical, plumbing, mechancial, building envelope and structural
* Commercial space limited to 25% of net rentable area & 20% of gross income
* 0,5% rate lock deposit refunded at closing
* Non-recourse* Low fees and points* Prepayment and assumption negostable* Occupancy requirement: 85% average occupancy for the past 6 months (steady or trending up), for projects within 3 years of construction / major rehab completion: no occupancy requirement, for example if 70% occupancy supports loan amount requested, start underwriting 2 months prior but loan takes 6 + months to close
* 700 + Credit Score* Strong borrower / sponsor liquidity, net worth , financials, and experience* Single asset, special purpose LLC, for profit or non-profit
* Escrows: Taxes, insurance and mortgage insurance premiums escrowed monthly, capital needs reserve maintained with monthly deposits to HUD guidelines (minimum $250 / year) mortgage insurance premium: due to HUD at closing 1% and 0.6% annually thereafter; 0.25% to 0.35% for affordable and subsidized properties; 0.25% for Energy Star Certified properties.
* HUD application fee: 0.30% of estimated loan amount due with application
* Third party reports: appraisal, environmental & capital needs assessment
Timeline: Typical application submitted 45 to 60 days of engagement: 60 - 90 days to HUD commitment and 30 - 45 days to closing