Are You Ready Now to Finance Your Multifamily New Construction Project?

FHA 221 (d)(4) program currently offers an industry-leading solution for multifamily developers looking to finance new apartment construction.

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Here are the program highlights:

  • Rates and leverage are more favorable now than other solutions
  • Longest terms
  • Non-recourse
  • High leverage
  • Fully assumable
  • Streamlined process for qualifying transactions
  • The economic climate may lessen the impact of Davis-Bacon prevailing wage rates on your development budget1

Sample Construction Loan Terms

Market Rate2

Size – $40MM
Amortization – Up to 40 years
Maximum LTC* – 85%
Rate – Interest only for construction, then fixed rate for the permanent loan term
DSCR – Minimum 1.176X

*Amount based on DSCR (ratios are rounded for presentation purposes) must be as follows:

  • 85% of NOI (1.176 DSCR) for market rate projects or Tax Credit projects without a significant rent advantage (i.e. the achievable rents are at least 10% below market.)

Affordable3

Size – $40MM
Amortization – Up to 40 years
Maximum LTC* – 90%
Rate – Interest only for construction, then fixed rate for the permanent loan term
DSCR – Minimum 1.15x

*Amount based on DSCR (ratios are rounded for presentation purposes) must be as follows:

  • 90% of NOI (1.11 DSCR) for projects with 90% or greater rental assistance

Click here to learn more about the FHA 221(d)(4) program

How is FHA 221 (d)(4) and conventional lending different? Click here to download our free piece on new multifamily construction solutions to learn more about how the two lending approaches work.

Visit our website here to learn more about all our offerings.

X-Caliber Google Review and Testimonial

The staff of X-Caliber is knowledgeable, responsive and flexible. Their understanding of the various agency debt products, coupled with proprietary debt products, offers prospective borrowers a variety of solutions to meet the financing needs of any project.

1 Current inflationary pressures on labor market and higher wages could mean there is less of an impact with Davis-Bacon prevailing wage requirements.
2 These are hypothetical and not actual rates or confirmed rate terms.
3 These are hypothetical and note actual rates or confirmed rate terms.

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