HUD 223(a)(7) Loan - Refinance of Existing HUD Loans
Existing FHA-Insured Multifamily Properties
Single-Asset, Special Purpose Entities (For-Profit or Non-Profit)
Entity can borrow up to 100% of the original principal balance (subject to General Loan Parameters)
|Term & Amortization||
The remaining term of the mortgage plus 12 years (subject to HUD approval) not to exceed the term of the original FHA-Insured mortgage
|General Loan Parameters||
The maximum loan is the lesser of:
Fixed rate, subject to market conditions at the time of rate lock
None, except standard carve-outs
Yes, 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.
|Mortgage Insurance Premium||
0.50% at Closing
|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 claim history is clean.