New Construction or Substantial Rehabilitation FHA 221(d)(4)

We are obsessed with quality and perpetual improvement. As we get to know you, our approach will be optimized and tailored toward your transactional objectives.

Loan Term:

40 years

Interest Rate:

Fixed rate, fully amortizing

Non-recourse:

Non-recourse

Assumable:

Fully assumable

Prepayment:

10% year one, then declining 1% per year; and customizable

Commercial Space:

No commercial space greater than 25% of net rentable area and 20% of effective gross income of the property

Borrower:

A single asset SPE

Commercial Space:

No commercial space greater than 25% of net rentable area and 15% of the underwritten effective gross income (increase to 30% of EGI permitted in Urban Renewal and Opportunity Zones)

Escrows:

Prior to construction, reserves for interest, insurance, taxes, working capital, and initial operating deficit must be established. These balances will be released to the borrower following six consecutive months of break-even operations. Post construction, insurance, taxes, and MIP will be escrowed monthly. Additionally, a capital needs reserve will be maintained with monthly deposits in accordance with HUD guidelines on a property specific basis.

Davis Bacon Wages:

Payment of prevailing wages for contractors and subcontractors

Third Party Reports:

Market Study, Appraisal, Environmental Report, future Capital Needs Assessment and an Architectural and Cost Review

DSCR/LTV Requirements:

For Loan Amounts up to $125 Million

Property Type

Maximum LTC

Minimum DSCR

Subsidized

90%

1.11

Affordable

90%

1.11

Market Rate

87%

1.15

For Loan Amounts $125 Million and above:

Property Type

Maximum LTC

Minimum DSCR

Subsidized ¹

87%

1.15

Affordable ²

80%

1.25

Market Rate

75%

1.30

Mortgage Insurance Premium:

0.25% due at closing and annually thereafter.

At least 90% of the units covered by a project-based Section 8 contract for at least 15 years.
Regulatory Agreement in place with minimum set-aside (e.g., 40% of units at 60% AMI, or 20 % of units at 50% AMI) in effect for at least 15 years