FHA SECTION 223(f)

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Program: 

The U.S. Department of Housing and Urban Development (HUD) has a mortgage insurance program for the purchase or refinancing of an existing multifamily project.

ELIGIBLE PROPERTIES

Market Rate, Affordable, and Subsidized Multifamily

ELIGIBLE BORROWERS

Single-asset, special purpose entities, either for-profit or non-profit.

LOCATION

Nationwide

LOAN AMOUNT

No Minimum/No Maximum (subject to General Loan Parameters)

INTEREST RATE

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

TERM & AMORTIZATION

Up to 35 years and fully amortizing

LIABILITY

Non-recourse.

MORTGAGE INSURANCE PREMIUM

Depending on property type:
.25% to 1.0% at Closing
.25% to 0.60% Annually

ASSUMABILITY

Yes, subject to HUD approval

PREPAYMENT

Typically loans are prohibited from prepayment for the 1st year, then have a 9% penalty declining 1% each year thereafter until 0%.  Alternative lockout and prepayment structures are available.

OTHER

• Properties must average physical occupancy levels of 85% for 6 months prior to submission, and maintain that level through loan closing
• Escrows required for repairs, mortgage insurance premium, taxes, insurance, and replacement reserves
• Third party reports include Appraisal, PCNA, and Phase I
• Secondary financing is allowed, subject to HUD guidelines and approval

Cash-out:

Based upon 80% of HUD appraised value of property.

General Loan Parameters

See chart below.

INTEREST RATE

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

TERM & AMORTIZATION

Up to 35 years and fully amortizing

LIABILITYNon-recourse.

MORTGAGE INSURANCE PREMIUM

Depending on property type: .25% to 1.0% at Closing .25% to 0.60% Annually

ASSUMABILITY

Yes, subject to HUD approval

PREPAYMENT

Typically loans are prohibited from prepayment for the 1st year, then have a 9% penalty declining 1% each year thereafter until 0%.  Alternative lockout and prepayment structures are available.

OTHER

• Properties must average physical occupancy levels of 85% for 6 months prior to submission, and maintain that level through loan closing
• Escrows required for repairs, mortgage insurance premium, taxes, insurance, and replacement reserves
• Third party reports include Appraisal, PCNA, and Phase I
• Secondary financing is allowed, subject to HUD guidelines and approval

Cash-out:

Based upon 80% of HUD appraised value of property.