Fixed rate construction and permanent financing for the construction of new apartment properties or for existing apartments requiring substantial rehabilitation. Available for properties throughout the United States.
$1,500,000 and larger.
Loan Term and Amortization:
The construction loan converts into a 40 year fully amortizing permanent loan upon the completion of construction. The construction loan is interest only.
Sponsor must have site control and all approvals in place. Certain minimum amounts or certain component replacements must be spent on the property in order to qualify as a substantial rehabilitation property.
Typically five year lockout period then with a penalty of 5% of loan amount declining 1% per year.
Debt Service Coverage:
Loan to Value:
Up to 95% of total replacement costs.
Underwritten with a minimum vacancy allowance of
Fully assumable, subject to FHA approval.
Maximum Loan Amount:
The lesser of: 95% of FHA's cost estimation, debt supported by 90% of the net operating income at stabilized rents or the statutory mortgage limits for the area.
Fixed rate for both the construction and permanent loans established after issuance of firm commitment by FHA based upon then current market conditions. Permanent rate is fixed prior to the start of construction.
Mortgage Insurance Premium: 1.0% for the first year payable at closing from loan proceeds and.SO% per year thereafter payable monthly.
Up to 3.5% of the loan amount for the combined construction and permanent loan and depending on loan size.
Contact your First American representative for a price quote.
Have any questions about this program? You can reach out to us by filling out a contact form.