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HUD/FHA

HUD/FHA 241(a)

Supplemental Loan for Multifamily + Healthcare Properties
PURPOSE

Finances repairs, additions and/or improvements (including energy conservation improvements) for Multifamily and Healthcare properties with FHA-insured first mortgages.

ELIGIBLE PROPERTIES

Multifamily, Nursing Homes, Assisted Living, Intermediate Care, and Board + Care facilities with existing FHA-insured mortgages.

BORROWER

Single asset, special purpose entity. Either for-profit or non-profit. As this is a second mortgage, the borrower will be the same entity in both the existing first mortgage and the 241(a) loan.

MAXIMUM LOAN AMOUNT

The lesser of:

  • Amount requested in the application;
  • 90% of the value of the HUD-estimated cost of improvements;
  • 90% of the estimated replacement cost;
  • An amount which, when added to the outstanding balance of the existing FHA-insured mortgage, does not exceed 85% LTV (for non-profit mortgagors) or 80% LTV (all other eligible entities); and
  • An amount based of total indebtedness.  
MINIMUM DSCR

Multifamily – 1.11x
Healthcare – 1.45x

TERM & AMORTIZATION

Equal to the remaining term of the FHA-insured first mortgage, not less than 10 years.

INTEREST RATE

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

MORTGAGE INSURANCE PREMIUM

Multifamily

  • Market Rate – 0.95%
  • Affordable Properties – 0.35%
  • Broadly Affordable/Energy Efficient – 0.25%

Healthcare

  • Without LIHTC – 0.72%
  • With LIHTC – 0.45%
RECOURSE

Non-recourse.

ASSUMABILITY

Fully assumable, subject to HUD approval.

PREPAYMENT

Negotiable. Typically, 10% year one, declining 1% per year.

THIRD PARTY REPORTS

Appraisal, Phase I ESA and market report. Other reports as needed.

ESCROWS/RESERVES

The supplemental loan will not require a second replacement reserve but will require a reanalysis of the existing reserve on the FHA-insured first mortgage. This new analysis will determine needs for the existing project and any new additions related to the supplemental loan.

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

0.5% of the loan amount.

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.