Financing Programs

Apartment Loans
   
FHA 221
   
FHA 223 (f)
   
Hard Money Loans
   
SBA Loans
   
Conventional Loans
   
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FHA HUD 223 (f)

FHA loans are backed by the U.S. government.  They offer higher LTVs and better terms & rates on 5+ unit multifamily apartments for properties that would not otherwise qualify.  This is a federal mortgage insured program.  It doesn't mean that the government is funding the loan...they are insuring it against default.  Section 223f is a section under the Federal National Housing Act.  It allows the FHA (Federal Housing Administration) to provide mortgage insurance to HUD approved lenders.  This is to assist in the purchase or refinance of apartment or other types of multifamily rental properties.  The loan program allows for long-term mortgages (up to 35 years) that can be financed with Government National Mortgage Association (GNMA) Mortgage Backed Securities.

This program is available for both non-profit and for-profit borrowers.  Under Section 223f, borrowers can receive an insured mortgage up to 85% of appraised value or sale price (whichever is less).  Or on a refinance, borrower can receive 80% with cashout (the 85% LTV applies to standard refinance).

The property must have been completed or rehabbed at least 3 years prior to applying for this loan.  Other than normal occupancy requirements, there are no income limits.  The properties can be market rate or LIHTC (low income housing tax credits) properties.  The propertis can also be specifically used for handicapped or elderly tenants.

The property can either be walk-up, row, elevator, detached, or semi-detached style.  The property must have at least 5 or more units to be considered.

FHA Section 221

Is a federal mortgage insured program.  It doesn't mean that the government is funding the loan...they are insuring it against default.  Section 221(d) is a section under the Federal National Housing Act.  It allows the FHA (Federal  Housing Administration) to provide mortgages insurance to HUD approved lenders.  This is to assist in the development or substantial rehabilitation of apartment or other types of multifamily rental properties.  The loan program allows for long-term mortgages (up to 40 years) that can be financed with Government National Mortgage Association (GNMA) Mortgage Backed Securities.

This is the best loan program in the marketplace today.  Multifamily Developers are often amazed at the benefits this program offers them.

The program is available for both non-profit and for-profit borrowers. Under Section 221(d)(3), non-profit borrowers can receive an insured mortgage up to 100% of the estimated replacement cost of the project.  Under section 221(d)(4), for-profit borrowers can receive a maximum mortgage of 90% the replacement cost estimate.

Most people mistakenly believe that this program is only for low income tenants...there is NO income limits.  The properties can be market rate, LIHTC (low income housing tax credits), and bond properties.  The properties can also be specifically used for senior or handicap tenants.

The property has to have at least 5 units and it can either be detached, semi-detached, row, walkup, or elevator style.  Non-apartment property types are also eligible for this program such as mobile home parks and assisted living facilities.  The properties can also have limited commercial/retail space.

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