The Federal Housing Administration (FHA) insures mortgage loans to facilitate the purchase or refinancing of existing multifamily rental housing under Section 223(f) of the National Housing Act. The program provides long-term, fixed-rate financing (up to 35 years) and allows financing through GNMA Mortgage-Backed Securities. Borrowers benefit from low interest rates and high-leverage debt, saving the borrower money and providing hard-to-obtain capital. This financing is available for existing multifamily market rate rental projects which are at least three years old. Hendricks & Partners improves the borrower’s experience with this program by assuring a smooth execution from application to closing and servicing with superior customer service during and after the process. Our veteran originators and underwriters have over 30 years of experience working with HUD and the FHA. We offer a wide variety of funding vehicles from Fannie Mae, Freddie Mac, FHA, and conduits.

Eligibility

• Acquisition or refinance of existing multifamily market rate rental projects at least three years old

Loan Structure

• Loan term: Up to 35 years
• Loan amount determined by lesser of:
  –– Statutory limits
  –– Amount supported by 85% of NOI (DSC: 1.17x)
  –– Refinance: 80% of value if cash proceeds are taken out. Otherwise, lesser of 85% of estimated value or 100% of costs
  –– Acquisition: 85% of acquisition cost or 85% of value
• Prepayment:
  –– No yield maintenance required
  –– Flexible lockout terms established at interest rate lock

Requirements/Fees

• Application fees:
  –– 0.3% firm commitment from HUD (Non-refundable FHA exam fee paid to HUD)
• Paid at closing:
  –– 1% MIP for year one
  –– 100% cost of repairs (mortgage proceeds) escrow plus a 20% LOC or cash escrow for Assurance of Completion of Repairs
• Annual fees:
  –– 0.45% MIP
  –– 0.25% - 0.50% annual GNMA Guarantee/Servicing fees

Program terms are subject to change.