To provide funding for the new construction or substantial rehabilitation of apartments. This program also provides permanent take-out financing upon completion of construction.
A multifamily property with at least 5 units. All units must have kitchens/bathrooms (except SROs) and comply with local building codes. A project 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.
Fixed-rate, based on the sale of GNMA securities, market tax-exempt and taxable bonds. A Mortgage Insurance Premium of 0.65% will be added to the final rate.
Loans should be in excess of $1,500,000. No maximum.
Up to 40 years, fully amortizing.
Permissible, but not to exceed 10% of total net rentable area. Also, commercial income cannot exceed 15% of the estimated total gross project income.
Fully-assumable; Prepayment penalties based on current market conditions.
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 Market Rate project, the loan amount will be the lesser of:
(1) 83.3% of the project’s net operating income divided by the applicable loan constant
(2) 83.3% of the eligible replacement costs, including a 10% builder/developers credit (BSPRA)
(3) Statutory mortgage limits as designated by HUD
For a substantial rehabilitation Market Rate project, the loan amount will be the lesser of (1) and (3) preceding; OR
(4a) 83.3% of the eligible rehabilitation costs, plus 83.3% of the lesser of the purchase price or HUD determined fair market value prior to rehabilitation (Purchase Transaction).
(4b) 83.3% of the project’s HUD determined fair market value prior to rehabilitation, plus 83.3% of the eligible rehabilitation costs (Refinance Transaction).
Escrows will be required for working capital (4% of mortgage amount) and for initial operating deficit.
Nothing contained herein is intended to be, nor should it be construed as, a commitment to lend on these or any other terms.