Existing FHA Refinance 223(a)(7)
Refinancing of Properties with Existing HUD Insured Debt
| Eligible Properties | All properties that currently have HUD insured loans |
|---|---|
| Loan Amount | Loan may be increased to original principal balance when first insured; No equity takeout is permitted under Section 223(a)(7) |
| Recourse | Non-recourse |
| Interest Rate | Fixed for term of loan, determined by market conditions at time of rate lock (Rate lock deposit is 1% and refunded at closing) |
| Loan Parameters | Maximum loan amount will be the lesser of: a) The original principal balance of the loan; b) The unpaid principal balance of the existing loan plus transaction costs and funds requested for repairs; or c) The amount that achieves a 1.11 times debt service coverage ratio |
| Term and Amortization | Shorter of: remaining term plus 12 years or original mortgage term |
| Prepayment and Assumption | Negotiable with best pricing for 10 years of call protection (can be a combination of lockout and/or penalty); Loan is fully assumable subject to HUD approval. |
| Escrows | a) Taxes and insurance are escrowed monthly; b) Replacement reserve required and the monthly deposit amount determined in accordance with HUD guidelines; The minimum reserve for replacement deposit is $250 per unit per year or such higher amount as determined by the PCNA |
| Mortgage Insurance Premium | Multifamily: .45% due to HUD at closing and .45% annually thereafter, escrowed monthly Healthcare: .50% due to HUD at closing and .50% annually thereafter, escrowed monthly. |
| HUD Application Fee | 30 basis points ($3 per $1,000) on requested loan amount but 15 basis points will be refunded to borrower by HUD post closing |
| Third Party Reports | PCNA |
| Timeline | Typical firm application is submitted within 30 days of engagement; On average, HUD issues a Firm Commitment within 45 days for multifamily and within 60 days for healthcare |
Finance Reports
First Madderra & Cazalot report scheduled for release in early 2011. Please check back.
Multi-Family Reports
A comprehensive data base of over 90,000 multi-family units throughout Louisiana and the Mississippi Gulf Coast area. Learn More
