Acquisition and Refinancing of Multifamily Properties
3 W. Main St, Suite 103
Irvington, NY 10533
ELIGIBLE PROPERTIES
Only properties with existing FHA multifamily insured loans
INTEREST RATE
Fixed-rate – 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
The lesser of:
- 100% of cost to refinance
- debt service coverage of 95% NOI for broadly affordable1; 90% of NOI for all others
- the original principal balance
TERM AND AMORTIZATION
Maximum of 12 years beyond in-place financing term, and is fully amortizing
COMMERCIAL SPACE
Limited to 25% of net rental area and 20% 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
REPLACEMENT RESERVES
Minimum of $250 per unit per year or as determined by a Project Capital Needs Assessment (PCNA); initial deposit, if warranted, will be required at closing
MORTGAGE INSURANCE PREMIUM
.25% to .50% due at closing and .25% to .50% annually thereafter
HUD APPLICATION FEE
.15% of requested loan amount due with submission of application
THIRD-PARTY REPORTS
HUD Environmental Review Online (HEROS) is required
PCNA may be waived on a case-by-case basis
TIMELINE
Firm commitment issued 30 calendar days after HUD’s receipt of complete application; closing 45-60 days
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