PROGRAM OUTLINE
New construction or substantial rehabilitation program, providing long term, fixed rate, fully assumable non-recourse financing. Loan provides for both construction and permanent financing in one commitment without occupancy requirements.  This program is provided through one of our correspondent lenders.

 ELIGIBLE PROJECTS

• Multifamily market rate rental apartment complexes
• New construction or substantial rehabilitation
• Construction work may be started prior to closing with approval of HUD
• Davis Bacon labor standards and prevailing wage requirement apply to construction
• Projects with LIHTC (Low Income Housing Tax Credits), new construction and sub-rehab are eligible

MORTGAGE TERMS

• Fixed rate, level amortization, non-recourse, fully assumable and 100% insured by FHA
• Term - up to 40 years permanent loan plus construction period
• Mortgage amount determined by lesser of:

  statutory limits loan amount supported by 90% of net operating income (1.11 debt service coverage) for profit motivated borrowers 90% of project costs

• Interest Rates:
  

  Taxable low interest GNMA Mortgage Backed Securities Tax exempt bonds

COSTS AND FEES

Application Fees:

• 0.3% of mortgage at application
• Third party reports

Paid at Closing:

• 0.5% Construction Inspection fee paid to HUD
• HUD permits a 2% Financing Fee
• HUD permits a 1.5% Placement Fee
• Discounts may be included in mortgage proceeds for GNMA MBS or private financing
• .50% MIP per year of estimated construction period for low income housing tax credit (LIHTC) transactions.  Otherwise .80% MIP per year of estimated construction period
• 2.0% Working Capital Letter of Credit during construction period
• Operating deficit escrow may be required
• Assurance of completion LOC or payment and performance bond (based on construction contract)

Annual Fees:

• 0.5% MIP for LIHTC projects (payable monthly) or  0.8% MIP for non - LIHTC projects (payable monthly)
• 0.25% to 0.50% annual GNMA Guarantee Fee/Servicing Fee

PREPAYMENT PENALTIES/LOCKOUTS

• No yield maintenance required
• Prepayment lockout, penalties are negotiated between investor and borrower at the time of interest rate lock

PROCESSING TIMES
Shorter processing times under the MAP program

• Pre-application review by HUD - 45 days
• Firm commitment review by HUD - 45 days

Information is available on other FHA programs upon request.