X-Caliber FHA Mortgage Insurance Section 221(d)(4)

Multifamily Housing New Construction/Substantial Rehabilitation

FHA MORTGAGE INSURANCE SECTION 221(d)(4)

ELIGIBLE PROPERTIES

Market-rate, affordable, and subsidized multifamily housing properties are eligible. To qualify for substantial rehabilitation, the cost of repairs and/or alterations must exceed $15,000 per unit adjusted for the HUD High Cost Factor or replace two or more building systems.

INTEREST RATE

Fixed-rate for both construction and permanent terms – determined by market conditions

BORROWER

For-profit or not-for-profit single asset entity

PERSONAL LIABILITY

Non-recourse, subject to standard carve-outs

MAXIMUM LOAN

PROPERTY TYPE	MAX LOAN TO VALUE	MIN. DEBT SERVICE
Broadly Affordable	90%	1.11x
Affordable²	87%	1.15x
Market-Rate	85%	1.18x

¹ At least 90% of units supported by a project-based rental assistance contract
² Regulatory agreement that at least meets the minimum Low-Income Housing Tax Credit restrictions of 40% of units at 60% AMI or 20% of units at 50% AMI in effect for at least 15 years

TERM

Maximum of 40 years – plus construction period

COMMERCIAL SPACE

Limited to 25% of net rentable area and 15% of effective gross income

PREPAYMENT AND ASSUMPTION

Flexible – best execution typically has a combination of lockout and prepayment penalty for 10 years, and is fully assumable, subject to HUD approval

MORTGAGE INSURANCE PREMIUM

.25% – .65% annually depending on project type

FEES

HUD Application: 0.30% of requested loan amount or associated costs
HUD Inspection: 0.50% of loan amount or total of all improvements

RESERVE ACCOUNTS

Initial Operating Deficit Reserve: Four to twelve months of amortizing debt service depending on deal
Replacement Reserves: Minimum of $250 per unit, per year, or as determined by their third-party vendor
Working Capital Deposit: 4% for new construction and 2% for substantial rehabilitation