HUD FHA 223(f) Apartment Loans

• 5+ residential unit properties, including, detached, semidetached, row, walkup, or elevator-type rental or cooperative housing.
• Properties must have complete kitchens and baths.
• The program is available for market rate rental housing (conventional) or for properties accepting rental assistance, either tenant based or project based (affordable).
• Commercial area is permissible, but cannot exceed 20% of the net rental area, or 25% of the gross revenues.
• Student housing properties that offer rents per room, not per unit, are ineligible.
• 30 day minimum lease term required.
• The loan may include repair costs not to exceed 15% of its value after repairs or no more than $6,500 per unit (except in high cost areas) - whichever is greatest. Repairs may not include replacing more than one major building system such as plumbing or electric.

The lesser of 35 years or a maximum term not to exceed 75% of remaining economic useful life of the property.

All 50 states, Puerto Rico, U.S. Virgin Islands, and Guam. No market - economic or population restrictions.

$2,000,000 with no maximum.

• 83.3% for market rate properties.
• 87% for affordable properties.

1.17. 1.15 for affordable properties.

Property must demonstrate a pattern of stable occupancy for 6-Months prior to application and maintained until closing.

N/A

Negotiable - typically a two-year lock out followed by a step down premium (e.g. 8,7,6,5,4,3,2,1).

Non-recourse subject to standard carve-outs.

Yes, subject to lender approval.

Available 12 months from date of closing of first loan

Permitted up to 7.5% on an exception basis

At commitment.

Cash out allowed when 80% of value exceeds existing debt plus transaction costs, but only 50% of the net cash will be released at closing. The other 50% will be escrowed until completion, inspection and approval of the non-critical (immediate) repairs.

• Tax and Insurance Impounds: Required.
• Replacement Reserves: Required - Monthly deposit required and amount depends on property condition.
• Initial Deposit to Reserve Fund: Required - One time deposit may be required depending on property condition.
• Critical and Non-Critical Repair Escrow: May be required for properties with life, safety, health or code related repair and/or maintenance concerns.

• Third Party Reports: appraisal, engineering report, environmental analysis and flood certification.
• FHA Inspection Fee: 1% of repair costs or $30 per unit if repairs are less than $3,000 unit.
• FHA Exam Fee: $3 per $1,000 of the loan balance.
• Financing Fee: 1%-3% depending on loan size and loan complexity.
• Permanent Placement Fee: 1%-2%.
• First Year Mortgage Insurance Premium: 1% of loan amount for market rate properties and .25%-.35% for affordable properties.
• Monthly Mortgage Insurance Premium: .60% and .25%-.35% for affordable properties.
• Borrower's Legal: Estimated at $10,000-$20,000.
• Title & Recording Fees: TBD.

• Experienced owner operators preferred.
• Minimum credit and financial capacity requirements.
• HUD experience preferred.