New construction or substantial rehabilitation of Market Rate or Affordable Multifamily Housing Properties.
Qualifies as substantial rehabilitation if the cost of repairs, replacements and improvements exceeds $16,983 per unit adjusted by HUD’s high-cost factor.
Eligible for up to 25% of net rentable area and 15% of EGI for 221(d)(4). Eligible for up to 25% of net rentable area and 30% of EGI for 220.
Single asset, special purpose entity. Either for-profit or nonprofit.
MAXIMUM LOAN AMOUNT
The lesser of:
- for Market Rate properties, applicable factors: 85% LTC, 1.176 DSCR;
- for Affordable properties, applicable factors: 87% LTC, 1.15 DSCR; and
- for properties with 90% or greater rental assistance, applicable factors: 90% LTC, 1.11 DSCR.
* Other parameters apply to mortgages over $75 million.
** Other than the above constraints, there are no minimum or maximum loan sizes.
TERM & AMORTIZATION
Interest only during the construction period, plus 40 years fully amortizing.
Fixed-rate, subject to market conditions at the time of rate lock.
MORTGAGE INSURANCE PREMIUM
Based upon the following:
- 0.65% for 221(d)(4);
- 0.70% for 220;
- 0.25% - 0.35% for affordable and subsidized properties; and
- 0.25% for Green Certified properties.
Non-recourse during both construction and permanent phases of financing.
Fully assumable, subject to HUD approval.
Negotiable. Best rates typically have a 1–2-year lockout with a declining prepayment penalty for the remainder of the first 10 years.
THIRD PARTY REPORTS
Market Study, Appraisal, Architectural and Costs Review and Phase I ESA. Other reports as needed.
Escrows for debt service, mortgage insurance premium, taxes, insurance, replacement reserves, and working capital and operating deficits are required.
FEDERAL LABOR STANDARDS
Davis-Bacon prevailing wages and reporting requirements.
ASSURANCE OF COMPLETION
Payment and performance bond or cash deposit/letter of credit.
HUD APPLICATION FEE
$3 per $1,000 of requested loan amount (1/2 due at pre-application).
HUD INSPECTION FEE
$5 per $1,000 of requested loan amount for new construction.
$5 per $1,000 of improvement costs for substantial rehabilitation.
This sheet sets out the general guidelines of a loan program and is designed solely as an aid to prospective borrowers and other clients. It does not represent or imply a contract or a commitment to lend funds. A commitment to lend funds may only be made by a written letter issued by NewPoint to a prospective borrower. This term sheet is subject to change at any time without notice at the sole discretion of NewPoint Real Estate Capital LLC.