FHA-HUD Multifamily & Mixed-Use Construction and Major Rehab Loans
Term: 42 years: 2 yr interest only construction loan + 40 yr fully amortizing loan
High leverage 80% to 90% LTC
$10 Million +
- FHA-HUD 221(d)(4)
- Apartments, mixed-use, affordable subsidized housing and non-dedicated student housing (up to 25% of net rentable area and 15% of gross income may be commercial)
- Our fee is built into the interest rate.
- High LTC: subsidized: 90% LTC with 1.11X DSCR; affordable: 87% LTC with 1.15X dscr; market rate: 85% LTC with 1.18X DSCR; subsidized and affordable: 80% LTC with 1.25 DSCR
- Finance new building construction and major renovation of existing buildings where:
a) Renovation $15,000+ per unit times local cost factor (typically 190% to 270%)
b) Renovation 50%+ over 2 building systems (electrical, plumbing, mechanical, building envelope & structural)
- No upfront fees for underwriting pricing and sizing loans; no application or 3rd party fees (such as appraisals) until borrower signs FHA-Hud, Fannie Mae or Freddie Mac terms sheet No income tax or income verification
- Rate locks 2 months before funding; can rate lock early by paying a one time, nonrefundable payment of 3 to 6 BPS per month (borrower chooses # of months to rate lock)
- Prepayment negotiable
- 620+ credit score
- Borrower must have experience in last 3 years on title building or major rehabbing similar projects(s)
- Borrower liquidity must cover “cash to close” (combined for all key principals)
- May hire HUD approved general contractor to build project but there must be someone on title and organization chart with multifamily experience with similar sized project(s)
- Title must close in a single asset, special purpose LLC, corporation or partnership
- Davis Bacon wages required
- For student housing: (1) Must accept student and non-student tenants (2) 12 month leases, (3) leased per unit not per bed and (4) rental rates must be comparable to non-student apartments in the area.
- Escrows: (1) before construction: reserves for interest, taxes, insurance, working capital (2 to 4% of loan amount) and initial operating deficit; balances released to borrower after 6 consecutive months of break-even operations; (2) Post construction: taxes, insurance & monthly mortgage insurance premium and capital needs reserve with monthly deposits by HUD guidelines
- Mortgage insurance premium: 0.65% (0.70% for urban renewal projects); 0.25% to 0.35% for affordable & subsidized properties; 0.25% for Energy Star certified properties; amounts due during construction term paid at closing).
- HUD application fee: 0.15% of loan amount due with initial application; plus 0.15% with final application (entire 0.30% due with final application for affordable and subsidized properties). Application fees are lower for properties in opportunity zones.
- Third party reports: appraisal, market study, environmental & future capital needs assessment plus review of final construction and architectural docs by HUD approved 3rd party contractor.
- Timeline: 12+ months from due diligence to closing
- Eagle is a correspondent lender for largest FHA-Hud Commercial Lender in USA. We do more than half of all the FHA-HUD Commercial loans that close in the USA. All other lenders combined do less than half of the rest. We rank in the top 10 every year for FNMA and Freddie Mac
Let’s move your project forward…
To submit your online loan request, click the blue GET STARTED Link for your PRE-APPROVAL Term Sheet within 48 business hours. No upfront fees, tax returns, income verification, credit cards, Social Security Numbers, uor credit checks required for PRE-APPROVAL.