ELIGIBLE PROPERTIES:Apartment or healthcare properties with mortgages that are currently insured by FHA. Moderate rehabilitation is permitted.
LOAN TYPE:
Fully amortizing permanent loan.
PREFERRED LOAN SIZE:
Any size insured mortgage is acceptable.
MAXIMUM LOAN:
The lesser of the following criteria:
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The original principal amount of the insured mortgage(s).
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90% of Net Income (after the subtraction of proprietary earnings for healthcare facilities), divided by the loan constant.
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The existing indebtedness plus transaction costs.
INTEREST RATES:
Fixed rate determined by market rates at the time of rate lock.
AMORTIZATION:
The remaining term of the existing mortgage (HUD may approve a term up to 12-years beyond the remaining term up to the original maximum term of the currently insured mortgage).
PERSONAL RECOURSE:
Non-recourse.
ASSUMABILITY:
Assumable, subject to CWCapital approval.
SUBORDINATE FINANCING:
Allowable, subject to HUD criteria.
WAGE REQUIREMENTS:
Davis-Bacon prevailing wage requirements do not apply.
ANNUAL MORTGAGE INSURANCE PREMIUMS:
The first year’s MIP is payable in advance of closing based on a rate established by HUD. Thereafter, the MIP is escrowed monthly. The rate is fixed at loan endorsement.
ESCROWS:
Monthly escrows for property insurance, real estate taxes, reserves for replacement, sinking fund (if applicable) and mortgage insurance premiums.
An initial deposit to replacement reserve and 100% of repair costs (both as determined by HUD) are escrowed from mortgage proceeds.
ENVIRONMENTAL ISSUES:
Special rules apply for properties which are located in Flood Hazard Zones as designated by FEMA.
Lead-based paint and asbestos must be abated in accordance with HUD requirements.
APPLICATION FEE:
An application fee of 0.3% of the requested mortgage amount is payable to HUD at the time of application. At the time of closing, HUD can refund half of the application fee.
INSPECTION FEE:
None required by HUD.
FINANCING AND PLACEMENT FEES:
Negotiable.
CLOSING EXPENSES:
Standard transaction costs, including legal fees, title insurance and survey.
OTHER HUD REQUIREMENTS:
Cash escrows or letters of credit are required for the following:
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10% of repair costs as a completion guarantee.
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2.5% of repair costs as a latent defects guarantee, due at completion of repairs.
HUD PROCESSING TIME:
One stage processing procedures:
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Firm Commitment Stage: 30 days for review.
PRELIMINARY SUBMISSION PACKAGE:
Include the following in your request for a loan quote:
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Property description and location map.
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Last 6 months rent rolls and year-to-date operating statement.
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HUD audits for prior 3 fiscal years.
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Current year operating budget.
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Statement of existing debt and escrow balances.
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Sponsor résumé.
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