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HUD/FHA

HUD/FHA 223(f)

Refinance or Acquisition of Multifamily Properties
PURPOSE

Refinance or acquisition of existing Multifamily Housing properties.

ELIGIBLE PROPERTIES

Existing Multifamily (minimum 5 units) and Mixed-Use properties.

COMMERCIAL SPACE

Eligible for up to 25% of net rentable area and 20% of EGI.

BORROWER

Single asset, special purpose entity. Either for-profit or nonprofit.

MAXIMUM LOAN AMOUNT

The lesser of:

  • for Market Rate properties, applicable factors: 85% LTV, 1.176 DSCR;
  • for Affordable properties, applicable factors: 87% LTV, 1.15 DSCR;
  • for properties with 90% or greater rental assistance, applicable factors: 90% LTV, 1.11 DSCR; and
  • greater of 100% of transaction costs or 80% LTV if refinance cash out transaction.

* 50% of cash out funded at closing; remainder upon completion of non-critical repairs. Other parameters apply to mortgage over $125 million.
** Other than the above constraints, there are no minimum or maximum loan sizes.

TERM & AMORTIZATION

A maximum term of the lesser of 35 years fully amortizing or 75% of remaining economic life.

INTEREST RATE

Fixed-rate, subject to market conditions at the time of rate lock.

MORTGAGE INSURANCE PREMIUM

1.0% payable at closing, 0.60% annually thereafter;
0.25%-0.35% for Affordable and subsidized properties; and
.25% for NGBS (Green) certified properties.

RECOURSE

Non-recourse.

ASSUMABILITY

Fully assumable, subject to HUD approval.

PREPAYMENT

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

Appraisal, PCNA, Phase I ESA and Radon. Other reports as needed.
ESCROWS    Escrows for taxes, insurance and mortgage insurance premium are required.

REPLACEMENT  RESERVES

Initial and monthly deposits required based on long-term physical needs of property.

HUD APPLICATION FEE

$3 per $1,000 of requested loan amount.

HUD INSPECTION FEE

Greater of 1.0% of the cost of repairs or $30 per unit ($1,500 max if repairs are less than $100K).

 

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.