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INVESTMENT REAL ESTATE SERVICES
Design of Loan Products
Design of Loan Products
HUD 223 (f)
Acquisition and Refinancing of Multifamily Properties
ELIBIBLE PROPERTIES
Market rate properties of any class, cooperatives, affordable or subsidized housing. Construction or any substantial rehabilitation must have been completed at least three years before application to HUD. Student housing is allowable, but cashflows cannot assum multiple rents from one unit and rents must be in line with market rate mulit
For More information on the offerings, please contact agency@spherecrest.com
Commercial
Space Limitiation
Limited to 25% of net rentable area and 20% of effective gross income
Borrower
Single asset, special purpose entity , either for profit or non-profit
Recourse
Non-recourse
Interest Rate
Fixed for term of loan, determined by market conditions at time of rate lock. Rate lock deposit is 0.5% and refunded at closing.
Loan Parameters
Subsidized
Affordable
Market Rate
For loan amounts up to $75 Million
Max. LTV 90%
Max. LTV 87%
Max. LTV 85%
Min. DSC 1.11x 90% 80%
Min. DSC 1.11x 90% 80%
Min. DSC 1.18x 85% 80%
For loan amounts $75 million and above, although HUD may impose more restrictive limits on loan amounts over $100 Million.
Subsidized & Affordable
Max. LTV 80%
Min. DSC 1.11x 80% 70%
Market Rate
Max. LTV 75%
Min. DSC 1.30x 75% 70%
1
At least 90% of the units covered by a project-based Section 8 contract.
Regulatory Agreement in place with minimum set-aside (e.g., 40% of units at 60% AMI, or 20% of units at 50% AMI? in effect for at least 15 years after the new loan closes.
2
Refinance cost includes satisfaction of existing debt (including penalties), any needed repairs, an initial deposit to capital needs reserve, due diligence and closing costs.
Repair and Rehab Limitations
Up to $15,000 per unit times a local cost factor (typically 190%-270%); additionally, repairs may not replace more than 50% of any two building systems: electrical, plumbing, mechanical, building envelope, structural.
Term and
Amortization
A maximum term of 35 years, fully amortizing.
Prepayment and Assumption
Negotiable with best pricing for 10 years of call protection can be a combination of lockout and/or penalty}; loan is fully assumable subject to HUD approval.
Escrows
Negotiable with best pricing for 10 years of call prtoection can be a combination of lockout and/or penalty}; loan is fully assumable subject to HUD approval.
a.
Capital needs reserve will be maintained with monthly deposits in accordance with HUD guidelines on a property specific basis (miniumum $250/unit/year)
b.
Mortgage Insurance Premium
1% due to HUD at closing and 0.6^ annually thereafter (0.25%-0.35% for affordable and subsidized properties, 0.25% for Energy Star certified properties).
HUD Application Fee
0.30% of estimated loan amount due with submission of application.
Lender Application Fee
Generally $25,000 to cover third-party reports and due diligence.
Rate-Lock Deposit
Typically 0.5% of the loan amount, paid at the time of commitment and refunded at closing.
Other Costs
Lender's legal, title, and other standard borrower closing costs.
Third Party Reports
Appraisal, Environmental and Capital Needs Assessment
Timing
Typical application is submitted within 45-60 days of engagement, followed by 60-90 days to issuance of HUD's commitment and 30-45 days to closing.
Contact
910 Harvest Dr.
Blue Bell, PA 19422
215.402.6777
30daySOFR
4.05% ▲
WSJP
5YR TR
7YR TR
10YR TR
7%
3.56% ▲
3.75% ▼
4% ▼
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