Program
Overview:
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Multi-Family
Project Housing may have been financed originally with conventional
or FHA insured mortgages. Properties requiring substantial
rehabilitation are not eligible for mortgage insurance under
this program. HUD permits the completion of non-critical repairs
after endorsement for mortgage insurance. |
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Program
Purpose:
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Section
223(f) insures lenders against loss on mortgage defaults.
The program allows for long- term mortgages (up to 35 years)
that can be financed with Government National Mortgage Association
(GNMA) Mortgage-Backed Securities. This eligibility for purchase
in the secondary mortgage market improves the availability
of loan funds and permits more favorable interest rates. |
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Eligible
Borrowers:
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Existing
Multi-Family Owners or Prospective Multi-Family Purchasers
can apply below with their scenero and property address of
the property that they want to refinance or purchase. |
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The
maximum mortgage limitation for a purchase transaction is the lesser
of:
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1. |
85 percent of HUD appraised value; |
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2. |
85
percent of the acquisition cost; |
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3. |
Per
County Requirements, |
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4. |
The
Mortgage Amount supported by 85% of net income. |
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Eligible
Activities:
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The
property must contain at least 5 residential units with complete
kitchens and baths and have been completed or substantially
rehabilitated for at least 3 years prior to the date of the
application for mortgage insurance. The program allows for
non-critical repairs that must be completed within 12 months
of loan closing. |
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Projects
requiring substantial rehabilitation are not acceptable under this section
and may not involve the replacement of more than one major system. The
remaining economic life of the project must be long enough to permit
a ten-year mortgage. The mortgage term cannot exceed 35 years or 75
percent of the estimated life of the physical improvements, whichever
is less. Davis Bacon prevailing wage requirements do not apply to this
program.
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Program
Application:
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The
Multifamily Accelerated Processing
(MAP), works with us to submits required exhibits for
a Firm Commitment Application, it then goes to Underwriting
and is packaged to the Multifamily Hub Center for review,
then it is reviewed to insure the loan is within acceptable
risk guidelines. |
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Many
considerations are made in this process, including but not limited to
Market Need and the capability of the borrower to repay the loan.
FHA
underwriting analysis must determine that there is enough project income
to repay the loan, taking into account all necessary project expenses.
If the proposed project meets program requirements, the local Multifamily
Hub Center issues a commitment to the us (the Lender) for Mortgage Insurance,
after the review process is completed.
