HUD 221(d)(4) Loan - New Construction or Rehabilitation of Multifamily Properties

Eligible Properties | Market rate, affordable, and subsidized multifamily properties. |
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Eligible Borrowers | Single-asset, special purpose entities, either for-profit or non-profit. |
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Location | Nationwide. |
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Loan Amount | No minimum/no maximum (subject to General Loan Parameters). |
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General Loan Parameters | For loan amounts up to $75 million:
(Subject to statutory mortgage limits)
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Interest Rate | Fixed-rate, subject to market conditions at the time of rate lock. |
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Term & Amortization | Interest-only term equal to actual construction period, plus 40 years fully amortizing. |
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Liability | Non-recourse. |
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Mortgage Insurance Premium | Depending on property type: |
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Assumability | Fully assumable, subject to HUD approval |
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Prepayment | Typically loans are prohibited from prepayment for the 1st year, then have a 9% penalty declining 1% each year thereafter until 0%. Alternative lockout and prepayment structures are available. |
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Professional Liability Insurance | HUD requires a minimum coverage of $1 million per occurrence and $3 million aggregate. Waivers may be granted in cases where premiums are high and claims history is clean. |
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Davis-Bacon Wages | Payment of prevailing wages is required by HUD for all contractors and subcontractors. |
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Other |
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