To provide funding for the new construction or substantial rehabilitation of apartments, cooperatives, and single room occupancy projects (SROs). This program also provides permanent take-out financing upon completion of construction.
Please contact Paragon for a complete list of eligibility requirements for this program. Section 220 properties must be located in specific eligible areas. For a project with substantial rehabilitation planned, it is considered eligible for substantial rehab when the cost of work will be in excess of $6,500 per unit multiplied by the area high cost factor, or when two or more major building components must be replaced. Apartments specifically designed for the elderly and/or limited to elderly occupancy are not permitted under this program.
Fixed-rate, based on the sale of GNMA securities, market tax-exempt and taxable bonds. A Mortgage Insurance Premium of 0.70% will be added to the final rate (0.45% for LIHTC deals)
Up to 40 years plus construction period, fully amortizing.
Permissible, but not to exceed 20% of total gross rentable area. Also, commercial income cannot exceed 30% of the estimated total gross project income.
Fully-assumable; Prepayment is negotiable.
DAVIS BACON WAGE
The Department of Labor’s published wage and fringe benefits must be paid during construction.
MAXIMUM MORTGAGE AMOUNT
For a new construction project, the loan amount will be the lesser of:
(1) The amount of debt that can be serviced by 83.3%, 87%, or 90% of net operating income for market rate, affordable, or rental assisted properties, respectively.
(2) Up to 83.3%, 87%, or 90% of replacement cost for market rate, affordable, or rental assisted properties, respectively.
(3) Statutory mortgage limits per unit as designated by HUD
(1) Mortgage Insurance Premium (MIP) – 0.70% per year (.45% for LIHTC).
(2) Working Capital Reserve – 4% of loan amount.
(3) Operating Deficit Escrow – To be determined.
(4) Performance and Payment Bond equal to 100% of estimated construction/rehab costs, or Assurance of Completion Agreement secured by cash/L.C. for 15% of construction/rehab costs.
Nothing contained herein is intended to be, nor should it be construed as, a commitment to lend on these or any other terms.