Mortgage Banking
FHA Financing Programs
FHA Section 223(a)7 Insured Mortgage - Refinancing of an Existing FHA Mortgage - Permanent Financing Programs and Mark to Mark Financing
PROGRAM OUTLINE
Program provides funds for the refinance of an existing FHA insured multifamily project. It is possible to finance 100% of all transaction costs.
Also, the FHA Section 223(a)7 Mark to Market Financing Program Under HUD's Office of Recapitalization provides property owners the opportunity to refinance and make repairs to their property while incorporating HUD's new Green Initiative with the repairs. Please call us for more information about the Mark to Market Program within HUD's FHA 223(a)7 refinance program.
PROJECT CRITERIA
Must be an existing multifamily project with an FHA insured multifamily mortgage
No rehabilitation permitted but repairs may be made for up to 15% of the value of the project.
An initial capital replacement reserve escrow must be established with monthly payments into an escrow-normally, current reserve for replacement is transferred which will cover the initial deposit also excess funds, if available, can be included in reserve for replacement account.
MORTGAGE TERMS
Fixed rate, level amortization, non-recourse, fully assumable, and 100% insured by FHA.
Term - The remaining term of the existing mortgage plus 12 years not to exceed 40 years
Refinancing determined by lesser of:
* 90% of net operating income (1.11 debt service coverage)
* The original mortgage amount
* Unpaid balance of debt, repairs (if any) and loan closing costs
Interest Rates (quoted based on market):
* Low interest GNMA Mortgage Backed Securities or whole loans
FINANCING COSTS (based on loan amount)
Paid at application:
* 0.3% for a Firm Commitment to insure a mortgage. This fee is an FHA exam fee and is non-refundable and paid to HUD (Half of this fee may be refunded after the closing.)
Paid at loan closing:
* Applicable GNMA discount fees or similar fees charged by private programs
* .5% for the first year’s Mortgage Insurance Premium (MIP) payable to HUD
* 100% of the cost of repairs (mortgage proceeds) must be set aside in an escrow account plus a 10% letter of credit or cash for Assurance of Completion of Repairs
* Financing fee
Annual Fees:
* 0.5% MIP
* 0.25% to 0.50% Annual GNMA Guarantee / Servicing Fees (Included in the Interest Rate Quote)
PREPAYMENT PENALTIES/LOCKOUTS
No yield maintenance required
Prepayment lockout or prepayment penalties may be required and are negotiated between investor and borrower at the time of interest rate lock
The information above is subject to change. The information above is believed to be accurate, however, no warranties are implied or expressed. Information is available on other FHA programs upon request.