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Multifamily
HUD 223(f)
Acquisition or Refinance
Program Overview
Provides a fixed rate, fully-amortizing loan for stabilized market rate and affordable multifamily properties nationwide.
Typical Terms
- Borrower Type
- For-Profit or Non-Profit single asset borrower entity
- Recourse / Guaranty
- Non-recourse
- Loan Term / Amortization
- Maximum term of 35 years, fully-amortizing, subject to 75% of the project useful life
- Interest Rate
- Determined by market conditions and fixed for the full term of the loan
- Commercial Space
- Limited to 25% of Net Rentable Area & 20% of Effective Gross Income
- Prepayment
- Negotiable. Typically, 10-year call protection with a combination of lockout and/or step-down pre-payment penalty
- Assumption
- Loans are fully assumable, subject to HUD approval.
- HUD Application Fee
- 0.3% of the loan amount, due at Firm Application submission
- HUD Inspection Fee
- Amount equal to: (1) $1,500 when repairs are less than $100,000; (2) $30 per unit when repairs are greater than $100,000 but less than $3,000/unit; or (3) the greater of $30 per unit or 1% of repair cost when repairs are greater than $3,000/unit
- HUD MIP
- 0.25% due at closing and annually, for all property types
- 3rd Party Reports
- Appraisal, Phase I Environmental, Project Capital Needs Assessment (PCNA), and Zoning. Lead Based Paint, Asbestos, Radon, and other specialty testing on as-needed basis per program requirements
- Reserves
- Typical Tax and Insurance escrows (including MIP) and Replacement Reserves as determined by PCNA and program requirements with a minimum annual deposit of $250/unit
- Escrows
- Repair Escrow equal to 20% of the repair cost for market rate properties and 10% of repair cost for affordable properties. Escrow may be funded with cash or letter of credit.
Loan Parameters
| Property Type | Loan Amounts Under $130M | Loan Amounts Over $130M | ||||
|---|---|---|---|---|---|---|
| LTV | Min DSCR | LTV (Cash Out) | LTV | Min DSCR | LTV (Cash Out) | |
| Market Rate | 87% | 1.15x | 80% | 75% | 1.30x | 70% |
| Subsidized¹ | 90% | 1.11x | 80% | 87% | 1.15x | 80% |
| Affordable² | 90% | 1.11x | 80% | 80% | 1.25x | 70% |
- ¹ At least 90% of the units must be encumbered by a project-based rental assistance contract
- ² Requires Regulatory Agreement in place for at least 15-years following closing with minimum LIHTC restrictions of 40% of units at 60% AMI or 20% of units at 50% AMI, with a rent advantage to market
Eligible Property Types
- Market Rate Multifamily
- Affordable Multifamily
- Section 8 HAP Multifamily