Apartment Refinance or Acquisition

Profit motivated, non-profit motivated and public owners are eligible.

Market rate, affordable¹ or rental assisted² properties.

REFINANCING: The lesser of:

1. The amount of debt that can be serviced by 85%, 87%, or 90% of net operating income for market rate, affordable¹, rental assisted², respectively;
2. 85%, 87%, or 90% of value for market rate, affordable¹, rental assisted², respectively;
3. The greater of 80% of value or 100% of the total cost of refinancing the existing indebtedness and other mortgageable transaction costs;
4. 100% of mortgageable transaction costs less the portion of grants, public loans and tax credits applied to mortgageable costs;
5. Statutory per unit limits.

ACQUISITION: The lesser of:

1. The amount of debt that can be serviced by 85%, 87%, or 90% of net operating income for market rate, affordable¹, or rental assisted², respectively;
2. 85%, 87%, or 90% of value for market rate, affordable¹, or rental assisted², respectively;
3. 85%, 87%, or 90% of acquisition cost (i.e. total cost to close) for market rate, affordable1, or rental assisted2 properties, respectively;
4. 100% of mortgageable transaction costs less the portion of grants, public loans and tax credits applied to mortgageable costs;
5. Statutory per unit limits.

35 years, not to exceed 75% of remaining economic life.

All properties must demonstrate average physical occupancy of at least 85% for a period of 6 months prior to submittal of the application and maintain through final endorsement (i.e. stable occupancy). Maximum underwritten physical occupancy of 93% for market rate or affordable¹ properties that do not have a 10% discount to the market rate rent levels. Maximum underwriting physical occupancy of 95% for affordable¹ properties with LIHTC units rents at a 10% discount to market. Maximum underwritten physical occupancy of 97% for rental assisted² properties.

Qualifies for Ginnie Mae guaranteed mortgage-backed securities, direct placement or may be used to credit enhance tax-exempt bonds.

Subject to market conditions.

The annual MIP is 0.60% of the outstanding loan amount for market rate transactions unless it qualifies for 0.25% through the Green/Energy Efficient Housing qualifications. 90% affordable or rental assisted qualify for the annual MIP of 0.25%. All other affordable are at 0.35% MIP.

The first year MIP is set at 1% of the loan amount for market rate and the program rate for affordable¹, rental assisted², and Green transactions.

Typically closed for 2 years then open to prepayment at 108% in year 3, declining 1% per year. Other variations are possible based on market conditions and borrower preferences.

Section 223(f) processing usually takes about 4 to 5 months (subject to deal specifics).

0.30% of the loan amount (non-refundable). Properties located in an opportunity zone benefit with a reduced application fee. Broadly affordable deals are reduced to 0.10% and affordable and market-rate deals are reduced to 0.20% of the loan amount.

1. $30 per unit where the repairs/improvements are greater than $100,000 in total but $3,000 or less per unit.
2. $30 per unit or 1% of the cost of repairs or $1,500, whichever is greater, where the repairs/improvements are more than $3,000 per unit.
3. $1,500 where the repairs/improvements are less than $100,000.

Annual deposits required equivalent to the greater of $250 per unit per annum or as identified in a Project Capital Needs Assessment (PCNA). An initial deposit will be required at closing which can be capitalized in the mortgage loan and is based on a PCNA.

None. The FHA insured loan is non-recourse; however, identified principal(s) will be required to sign “Bad Boy” carve outs at closing.

Yes, subject to HUD and lender approval (0.05% of the original loan amount).

Permitted in the form of a surplus cash note, combined loan-to-value cannot exceed 92.5% unless the secondary financing is from a governmental source.

Funds for repairs, deferred maintenance and capital improvements for generally up to the greater of (1) $19,293 per unit (adjusted for high cost areas).

Nationwide.

• Loans in excess of $125 million have slightly lower loan to value limits and slightly higher debt service coverage requirements.
• Although not required, all transactions are encouraged to participate in a concept meeting with HUD prior to application submittal.
• This program can be used in conjunction with Low Income Housing Tax Credits and is often used to refinance/acquire properties that involve Section 202, Section 236 and Section 8 funding.
• Davis-Bacon prevailing wage requirements do not apply to any repairs.
• A PCNA will be required every 10 years.