HUD 221(d)(4) Loan - New Construction or Rehabilitation of Multifamily Properties
Market rate, affordable, and subsidized multifamily properties.
Single-asset, special purpose entities, either for-profit or non-profit.
No minimum/no maximum (subject to General Loan Parameters).
|General Loan Parameters||
New Construction: The maximum loan is the lesser of
For loan amounts up to $75 million:
(Subject to statutory mortgage limits)
Fixed-rate, subject to market conditions at the time of rate lock.
|Term & Amortization||
Interest-only term equal to actual construction period, plus 40 years fully amortizing.
|Mortgage Insurance Premium||
Depending on property type:
Fully assumable, subject to HUD approval
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.
|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.
Payment of prevailing wages is required by HUD for all contractors and subcontractors.