Subject to Davis-Bacon requirements.
An Operating Deficit escrow will be required
by HUD to cover operating losses until
sustaining occupancy is reached and must
be funded by mortgagor with cash or a letter
An escrow is required for Working Capital.
This must be funded by mortgagor with
cash/letter of credit.
A Replacement Reserve account must be
established at closing and is made available
for replacement of depreciable capital items.
The account must be maintained with
monthly contributions throughout the life of
Full escrows for property taxes, all
applicable insurance and any special
assessments are funded at closing and
must be maintained throughout the life of
This is a non-recourse loan.
vLong loan term - up to 40 years in addition to
the construction period, fully-amortizing.
Low, fixed interest rates.
vHigh loan-to-cost ratio up to 90% for rental
assistance; 87% for affordable; and 85% for
Most affirmative and negative loan covenants
typically found in conventional loan
agreements are eliminated.
Converts to permanent financing upon
completion (no occupancy requirements) at
no extra cost.
No low-income tenancy requirements.
Fully assumable, subject to HUD and CMI
Can be used as a credit enhancement for tax
Debt service coverage ratio of 111% for
rental assistance; 115% for affordable; and
118% for market rate projects.
vFF&E may be included as a mortgageable
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