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Hud Program 223 (F) : Apartment Refinance Acquisition

The document provides information on HUD's 223(f) program for refinancing or acquiring eligible multifamily properties containing 5 or more residential units. Key details include: - Eligible properties must have been completed or substantially rehabilitated for at least 3 years. - Loans can be up to 35 years or 75% of the building's remaining economic life. Rates are 90-85% of appraised value depending on property type. - Debt service coverage ratios of 1.11-1.176 depending on property type are required. - Typical processing steps, fees, and ongoing requirements are outlined.

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109 views2 pages

Hud Program 223 (F) : Apartment Refinance Acquisition

The document provides information on HUD's 223(f) program for refinancing or acquiring eligible multifamily properties containing 5 or more residential units. Key details include: - Eligible properties must have been completed or substantially rehabilitated for at least 3 years. - Loans can be up to 35 years or 75% of the building's remaining economic life. Rates are 90-85% of appraised value depending on property type. - Debt service coverage ratios of 1.11-1.176 depending on property type are required. - Typical processing steps, fees, and ongoing requirements are outlined.

Uploaded by

eimg20041333
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
You are on page 1/ 2

082018

www.huntrealestatecapital.com

For more information on

HUD PROGRAM 223(F)


Hunt Real Estate Capital,
please call:
(2 12) 5 8 8-2 0 1 5 Eligible properties contain 5 or more residential units and have been
completed or substantially rehabilitated for at least 3 years prior to the
date of application for mortgage insurance.

APARTMENT REFINANCE ACQUISITION


35 year fixed term or up to 75% of the building’s remaining economic life (lesser of)
Non-recourse loan
Assumable if approved by HUD and lender

Maximum loan is the lesser of

HUD appraised value or acquisition cost multiplied by


90% of projects with 90% rental assistance
87% of affordable housing transactions (tax credits)
85% of market rate deals
80% of cash out transactions
50% of cash out at closing will be held in escrow and will be released upon completion
of all identified immediate repairs

Debt Service Coverage


1.11or 90% NOI for projects with 90% rental assistance
1.115 or 87% NOI for affordable housing transactions (tax credits)
1.176 or 85% NOI for market rate deals

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 immediate repairs

Non-mortgageable Costs
20% of estimated repairs (LOC or cash) – held until repairs are complete
Tax and insurance escrow

Typical Processing Steps


Concept meeting with HUD
Firm Application submitted – will include:
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) CONTINUED
Page 2

www.huntrealestatecapital.com

HUD PROGRAM – 223(F) - CONTINUED

HUD Application Fees


$3 per thousand of requested mortgage amount

Mortgage Insurance Premium


1% of mortgage amount is payable at closing for market rate. 0.25% of mortgage
amount is payable at closing for affordable properties. Thereafter, an annual premium
of .25% paid monthly on the average outstanding principal balance for affordable
properties and .60% for market rate.

Green Building Standards/Energy Efficiency


If a property will meet these standards, the MIP rate can be reduced to 0.25%

Additional Requirements
Project must comply with the specified HUD, state, and local standards
Owner must execute a HUD regulatory agreement governing the projects operations
Loans in excess of $50 million will be subject to additional underwriting criteria

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