Permanent non-recourse mortgage financing for the refinance of mortgages on multifamily projects already insured under the National Housing Act.
Allows owners to reduce debt service requirements and accomplish needed repairs.
Existing projects that are fully insured at the time of application. This includes formerly coinsured loans that were converted to full insurance. Projects that are not subject to lock-out or prepayment restrictions which prevent refinancing. Projects with project-based Section 8 assistance are allowed – See Paragon for details.
Fixed-rate, based on the sale of GNMA securities, market tax-exempt and taxable bonds.
Not to exceed 12 years beyond the remaining term of the existing mortgage.
Fully-assumable; No prepayment penalties. However, borrower may wish to accept prepayment penalty provision in order to secure a more favorable interest rate.
May not exceed the lowest of the following:
- the original principal amount of the existing mortgage,
- the unpaid principal amount of the existing insured mortgage to which certain HUD-approved items (e.g. repairs, cost of refinance) may be added, or
- the amount that can be amortized by 90% of net operating income.
Transfer of Replacement Reserve Escrow Account and annual payments to this account required. HUD will determine if the current monthly escrow is sufficient.
The borrower may submit proposed repair items and estimate of associated costs which can be included in the loan amount. Additionally, HUD may require repairs if there are any deferred maintenance issues.
No Appraisal or Market Study Required, greatly reducing processing time.
Expedited processing procedures by HUD Field offices
Streamlined application and underwriting process
(1) Mortgage Insurance Premium (MIP) – .5% of loan amount
(2) Mortgagee/Mortgagor Legal Fees
(3) Title, recording fees, and other closing costs (survey costs, if applicable)
(4) Loan Discounts (if applicable)
(5) FHA Examination Fee (1/2 is refundable after closing)
Processing contingent upon completed transfer of physical assets (TPA), if applicable.
Current lender must obtain Insurance Termination Approval from HUD Headquarters
Note: All Replacement Reserve, Taxes & Insurance Escrows will be transferred
Nothing contained herein is intended to be, nor should it be construed as, a commitment to lend on these or any other terms.