HUD 223(a)(7) Loan - Refinance of Existing HUD Loans

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ELIGIBLE PROPERTIES

Existing HUD-insured healthcare and multifamily properties.

ELIGIBLE BORROWERS

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

LOCATION

Nationwide.

LOAN AMOUNT

Existing HUD-insured loan may be increased back up to 100% of the original principal balance (subject to General Loan Parameters)

GENERAL LOAN PARAMETERS

The maximum loan amount is the lesser of:

• The original HUD-insured loan amount.
• The outstanding HUD-insured loan amount plus all closing costs, capital improvements, prepayment penalties, and repairs.
• Minimum DSCR of 1.11x.

INTEREST RATE

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

TERM & AMORTIZATION

The term of the existing HUD-insured loan may be extended by up to 12 years (subject to HUD approval) not to exceed the term of the original loan.

LIABILITY

Non-recourse.

MORTGAGE INSURANCE PREMIUM

0.50% at closing,
0.55% annually thereafter.

ASSUMABILITY

Fully assumable, 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.

PROFESSIONAL LIABILITY INSURANCE

HUD requires a minimum coverage of $1 million per occurrence and $3 million in aggregate.  Waivers may be granted in cases where premiums are high and claims history is clean.

OTHER

• Cash-out refinancing is not permitted.
• PCNA report required for multifamily loans and term extension

Pricing:

Contact your First American representative for a price quote.