FHA/HUD Section 223(f)

Acquisition and Refinancing of Multifamily Properties

Eligible Properties

Market rate, low-to-moderate income and subsidized multifamily properties

Commercial Space

Limited to 25% of net rentable area and 20% of effective gross income

Recourse

Non-recourse

Loan Parameters

Loan amounts up to $75 Million.

Property Type Maximum Loan to Value Minimum Debt Service Coverage Acquisition

Loan to Cost

Max Cash-Out

LTV3

Subsidized1 90% 1.11 90% 80%

Affordable2 87% 1.15 87% 80%

Market Rate 85% 1.18 85% 80%

Loan Amount

No maximum (limited by loan parameters)

Interest Rate

a) Fixed for term of loan, determined by market conditions at time of rate lock (rate lock deposit is 1.00% and refunded at closing)

Mortgage Insurance Premium

0.65% due to HUD at closing and 0.65% annually thereafter, escrowed monthly (0.25%-0.35% for affordable properties and those with at least one unit under a project-based Section 8 HAP contract, 0.25% for properties with energy star ratings of at least 75)

Loan Parameters

Maximum loan amount will be the lesser of:

a. A percentage of replacement cost, including as-is value of land for new construction and as-is value of property for substantial rehabilitation, as follows: (i) 85 % for market rate transactions; (ii) 87% for affordable transactions; and (iii) 90% for projects with 90% of greater rental assistance

b. FHA mortgage statutory per unit limits adjusted for local high cost factor, or

c. An amount that achieves a minimum debt service coverage, as follows (i) 1.18x DSC for market rate properties; (ii) 1.15x DSC for affordable transactions; and (iii) 1.11x DSC for projects with 90% or greater rental assistance.

Cost of offsite improvements, FF&E, marketing, construction contingency and operating deficit reserve excluded from loan amount

Loan Term & Amortization

Construction loan period (interest-only), followed by 40-year permanent (fully amortizing)