CONSTRUCTION AND SUBSTANTIAL REHABILITATION

OF MULTIFAMILY PROPERTIES

FHA Section 221(d)(4) Mortgage Insurance Program

(401) 525-6544

Back to HUD Financing

 Eligible Multifamily Projects

  • Market rate, moderate-income and subsidized properties
  • Existing projects, at least three years old, with no more than minimal required levels of repair and with no substantial rehabilitation within the past three years.
  • No rent control
  •  Student housing is not excluded, but multiple rents from one unit will not be underwritten.
  • Limitation on commercial space: no more than 20% of the net rentable area and 20% of effective gross income

Loan Parameters

The maximum loan amount for New Construction is the least of:

  • 90% of estimated replacement cost, including a developer's fee equal to 10% of all hard and soft costs other than the land (Cost of offsite improvements; furniture,    fixtures and equipment; marketing costs that exceed the working capital escrow; construction contingency; and operating deficit reserve are excluded from the loan amount).
  • FHA's statutory per-unit limit with a geographic cost adjustment factor, or
  • Amount that meets a 1.11 times debt service coverage test utilizing the all-in loan constant.

              NOTE: The loan amount is not limited by appraised value and may exceed appraised value.

The maximum loan amount for Substantial Rehabilitation is the least of:

  • the as-is value plus 90% of the cost of rehabilitation. (Cost of furniture, fixtures and equipment, marketing costs that exceed the working capital escrow and operating deficit reserve are not included in the loan amount)
  • FHA's statutory per-unit limit with a geographic cost adjustment factor, or
  • Amount that meets a 1.11 times debt service coverage test utilizing the all-in constant

 Interest Rate The interest rate is fixed for the term of the loan. Currently 6.50%  (7-22-09)

Term and Amortization  Actual construction term plus up to 40-years; Loan will fully amortize over permanent portion of loan term.

Recourse     Non-recourse 

Assumable  Loan is assumable, subject to HUD approval and payment of an assumption fee and related transaction expenses.

 

 

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 Winthrop Real Estate Solutions, LLC 
1240 Pawtucket Ave, Rumford, RI 02916

 

 Howard L. Weldon

(Direct) 401-525-6544
 (Fax) 888-679-0773
   hweldon301@msn.com

 

Ewa S. Slusarek                                     William C. Bryson

(Direct) 401-921-6268                                                (Direct) 401-487-2280
(Fax) 401-463-0164                                                    (Fax) 888-679-0773
      ewaslusarek@aol.com                                               wbryson2280@gmail.com