HUD Programs

hudmulti

New Construction or Substantial
Rehabilitation (HUD Section 221(d)(4))

Features:

This is a non-recourse loan. Long loan term – up to 40 years in addition to the construction period, fully amortizing. Low, fixed interest rates. High loan-to-cost ratio up to 90% for rental assistance; 87% for affordable; and 85% for market projects. 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 approval. Can be used as a credit enhancement for tax exempt bonds. Debt Service Coverage of 1.11 for rental assistance; 1.15 for affordable; and 1.18 for market rate projects. FF&E may be included as a mortgageable project cost.

Eligibility

Mortgagor entity may be either for-profit or not-for-profit.

hudnursing

New Construction or Substantial Rehabilitation (HUD Section 221(d)(4)) Low Income Housing Tax Credits

Features:

High HUD priority for affordable housing. Expedited processing with HUD goal to issue Firm Commitment within 30 days of an acceptable application and closing within 60 thereafter. This is a non-recourse loan. Long loan term – up to 40 years in addition to the construction period, fully-amortizing. Low, fixed interest rates. High loan-to-cost ratio up to 90% for rental assistance and 87% for affordable. 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. Fully assumable, subject to HUD and CMI approval. Can be used as a credit enhancement for tax exempt bonds. Debt service coverage ratio of 1.11 for rental assistance and 1.15 for affordable. FF&E may be included as a mortgageable project cost.

Eligibility

Mortgagor entity may be either for-profit or not-for-profit. Project must contain 5 or more units. Must have either 4% LIHTC with tax exempt bonds, or a 9% LIHTC award.

ra-223f

Refinance and Acquisition (HUD Section 223(f))

Features:

Long loan term – up to 35 years. Low, fixed interest rates, fully amortizing. Loan-to-value ratio up to 90% on rental assistance; 87% on affordable; and 85% on market rate projects. Debt Service Coverage of 1.11 on rental assistance; 1.149 on affordable; and 1.1765 on market rate projects. Cash-out equity may be allowed and is subject to the loan-to-value of 80%. Loan is fully assumable subject to HUD and CMI approval. Most affirmative and negative loan covenants typically found in conventional loan agreements are eliminated. Davis Bacon prevailing wages not required.

Eligibility

Mortgagor entity may be either for-profit or not-for-profit. Property must be at least 3 years old. Project must contain 5 or more units and can be a market rate, affordable, subsidized or a combination of all.  Allows for minor rehabilitation up to approximately $40,000/unit, including specific capital improvements, modernization, utility conversion or other value enhancement.

223a7

Streamlined Refinance of Existing HUD Loan (Section 223(a)(7))

Features:

  • This is a non-recourse loan. Extended loan term may be allowed up to an additional 12 years past original maturity date. Low, fixed interest rates, fully amortizing. Most affirmative and negative loan covenants typically found in conventional loan agreements are eliminated. Fully assumable, subject to HUD and CMI approval. Debt service coverage ratio of 1.11 for market rate properties and 1.05 for affordable and/or subsidized projects held by Non-profit owner. No appraisal, market study or environmental reports typically required and minimal documentation is required

Eligibility

Property must currently have a HUD insured loan. Mortgagor entity may be either for-profit or non-for-profit.

207m

Manufactured Home Park New Construction or Substantial Rehabilitation (HUD Section 207(m))

Features:

This is a non-recourse loan. Long loan term – up to 40 years, fully-amortizing. Low, fixed interest rates. Loan-to-value up to 90%. High loan-to-cost ratio up to 90% for rental assistance; 87% for affordable; and 85% for market projects. Most affirmative and negative loan covenants typically found in conventional loan agreements are eliminated.

Eligibility

Rehabilitation must be of such an extensive nature as to affect livability, marketability and competitive position and that; otherwise, the park is incapable of meeting its operating expenses and debt service obligations. Subject to Davis-Bacon requirements. Converts to permanent financing upon completion at no extra cost. No low-income tenancy requirements. Fully assumable subject to CMI and HUD approval. Can be used as a credit enhancement for tax exempt bonds. Debt service coverage ratio of 1.11 for rental assistance; 1.15 for affordable; and 1.18 for market rate projects.

213

Cooperative New Construction, Substantial Rehabilitation or Conversion (HUD Section 213)

Features:

40 year loan term plus the construction period not to exceed 75% of the remaining useful life. Debt Coverage ratio of 1.00 of net operating income. 98% Loan to Cost (development costs plus as-is value). Loan is subject to statutory limits as published in Federal Register under Section 213. The loan is non-recourse. Low fixed interest rates, fully amortizing. FF&E may be included as a mortgageable project cost. Developer fee and marketing costs are mortgageable project costs.

Eligibility

New Construction cooperatives using the management style, pre-sale model are eligible where the cooperative corporation is formed up-front and development agent develops the property on behalf of the cooperative. Cooperative shares are pre-sold to resident members. Investor model and non-profit model may be used with HUD approval. Age restricted cooperatives are eligible provided the primary occupant is age 62 years or older. Conversion of existing multifamily properties to cooperative ownership is eligible under this program. Davis-Bacon guidelines are applicable to this program. 213 is not eligible for accelerated processing. Sponsor/Development Agent must guarantee carrying charges on any unsold shares for 5 years.

r-223f

Cooperative Refinance (HUD Section 213-223(f))

Features:

The is a non-recourse loan. Long term loan up to 35 years, not to exceed 75% of remaining economic life. Low, fixed interested rates, fully amortizing. Debt Service Coverage of 1.00 of net operating income. The lesser of 65% of Market Rate Rental Apartment Project or 55% of gross sell-out value. The loan is fully assumable subject to the approval of CMI and HUD.

Eligibility

Eligible Mortgagors include nonprofit cooperative housing corporations or nonprofit Cooperative Ownership Housing trusts. The property must contain at least 5 residential units with complete kitchens and bathrooms. If the Cooperative was a conversion, the conversion must have been completed at least three years prior to application date. The project must be fully subscribed with no units owned by the original developer. Age restricted cooperatives are eligible provided the primary occupant is age 62 years or older. At least 75% of the total number of units must be occupied by Cooperative members and no more than 25% of the units may be owned by investors. Commercial space is allowed provided it does not exceed 25% of the total net rental area and not exceed 20% of the effective gross income.

hudnursing

New Construction or Substantial Rehabilitation (HUD Section 232)

Features:

This is a non-recourse loan. Long loan term – up to 40 years in addition to the construction period, fully-amortizing. Low, fixed interest rates. Loan-to-value ratio – Skilled Nursing Facility (SNF) – up to 80% for a for-profit enterprise, inclusive of major movable equipment, (85% for a not-for-profit) for both New Construction and Sub-Rehab. Loan-to-value ratio – Assisted Living Facility (ALF) – up to 75% for a for-profit enterprise inclusive of major moveable equipment, (80% for a not-for-profit) for New Construction and 80% for a for-profit enterprise (85% not-for-profit) for a Sub-Rehab. Most affirmative and negative loan covenants typically found in conventional loan agreements are eliminated. Converts to permanent financing upon completion at no extra cost. Fully assumable, subject to CMI and HUD approval. Can be used as a credit enhancement for tax exempt bonds. Debt Service Coverage of 1.45.

Eligibility

Mortgagor entity may be either for-profit or not-for-profit.

Board and Care facilities: 1. Must have at least one full private bath for every four residents 2. Must have a central dining area and kitchen, with appropriate recreational facilities, and 3. Must not charge founder’s, life care or similar fees.

Assisted Living facilities: 1. Residents must require assistance with at least 3 activities of daily living, 2. Must provide central dining, kitchen, lounge, etc. 3. Must offer three (3) meals a day.

ra-232

Refinance and Acquisition (HUD Section 232/223(f) LEAN)

Features:

This is a non-recourse loan. Long term loan – In addition to the construction period, 40-years fully- amortizing. Low, fixed interest rates. Loan-to-value ratio – Skilled Nursing Facility (SNF) – up to 80% for a for-profit enterprise, inclusive of major movable equipment, (85% for a not-for-profit) for both New Construction and Sub-Rehab. Loan-to-value ratio – Assisted Living Facility (ALF) –  up to 75% for a for-profit enterprise inclusive of major moveable equipment, (80% for a not-for-profit) for New Construction and 80% for a for-profit enterprise (85% not-for-profit) for a Sub-Rehab. Most affirmative and negative loan covenants typically found in conventional loan agreements are eliminated. Converts to permanent financing upon completion at no extra cost. Fully assumable, subject to CMI and HUD approval. Can be used as a credit enhancement for tax exempt bonds. Debt Service Coverage of 1.45.

Eligibility

Property must be at least 3 years old. Mortgagor entity may be either for-profit or not-for-profit. Property must meet State eligibility requirements with regard to licensing and operating standards. For assisted living/board and care facilities, independent living units may not exceed 25% of the total number of residents. No founder’s fees, life care fees or similar charges are permitted.

232a7

Streamlined Refinance of Existing HUD Loan (HUD Section 232/223(a)(7) LEAN)

Features:

This is a non-recourse loan. Extended loan term may be allowed up to an additional 12 years past original maturity date. Low, fixed interest rates, fully amortizing. Most affirmative and negative loan covenants typically found in conventional loan agreements are eliminated. Fully assumable, subject to CMI and HUD’s approval. Debt service coverage ratio of 1.11. No appraisal, market study or environmental reports typically required and minimal documentation is required.

Eligibility

Property must currently be insured by HUD. Mortgagor entity may be either for-profit or non-for-profit. Hospitals excluded from this program.

hudhospitals

Hospital New Construction or Substantial Rehabilitation (HUD Section 242)

Features:

This is a non-recourse loan. Long loan term – up to 25 years, fully-amortizing. Low, fixed interest rates, fully amortizing. Most affirmative and negative loan covenants typically found in conventional loan agreements are eliminated. Converts to permanent financing upon completion at no extra cost. Fully assumable, subject to HUD and CMI approval. Can be used as a credit enhancement for tax exempt bonds.

Eligibility

Mortgagor entity may be either for-profit or not-for-profit. For acute care hospitals, no more than 50% of total impatient days during any 1 year may be assignable to chronic convalescence and rest, drug and alcohol, epileptic, nervous and mental, mentally deficient and tuberculosis care.

hudnursing

Hospital Refinance and Acquisition (HUD Section 242/223(f))

Features:

This is a non-recourse loan. Long loan term – up to 25 years, fully amortizing. Low, fixed interest rates. Most affirmative and negative loan covenants typically found in conventional loan agreements are eliminated. The Loan is assumable subject to CMI and HUD’s approval. Non-profit hospitals can utilize mortgage insurance as a credit enhancement to issue tax exempt bonds. Depending on market conditions, a commercial bond insurer may be utilized to achieve an “AAA” bond rating. Of note, non-profit organizations may elect to issue taxable notes in conjunction with GNMA mortgage insurance to achieve the equivalent of an “AAA” bond rating. For-profit hospitals can utilize mortgage insurance in conjunction with GNMA mortgage insurance to issue collateralized securities.

Eligibility

Mortgagor entity may be either for-profit or not-for-profit. Allows for minor rehabilitation up to approximately $40,000/unit, including specific capital improvements, modernization, utility conversion or other value enhancement. For acute care hospitals, no more than 50% of total inpatient days during any 1 year may be assignable to chronic convalescence and rest, drug and alcohol, epileptic, nervous and mental, mentally deficient and tuberculosis care.