Hud Financing
Acquisition refinance HUD 223(f) loan is a highly effective option for borrowers who want to acquire or refinance multifamily properties. HUD 223(f) loans begin at $1 million (though exceptions are sometimes made), and have no maximum loan amount. These loans typically have a 35-year fixed-rate term, though the term can be as short as 10 years, as long as the loan remains fully amortizing. Like HUD 221(d)(4) loans, HUD 223(f) properties with a certain number of affordable or low-income housing units may qualify for low income housing tax credits (LIHTCs).
If you want to build or substantially renovate an apartment building or multifamily property with five or more units, a HUD 221(d)(4) loan might be the perfect solution. HUD 221(d)(4) loans are insured by the U.S. Department of Housing and Urban Development (HUD), and offer some of the industry’s best terms. HUD offers a 40-year, fixed-rate, fully amortizing loans, which also offers a 3-year interest-only construction period, bringing the maximum term of this loan to an incredible 43 years. In addition, these loans are fully assumable (with FHA/HUD approval), and are non-recourse.
| Property Type | Market rate property of any class, cooperatives, & affordable housing |
| LTV | Up to 90% |
| Term | Maximum of 40 years years |
| Rate |
Fixed for term of loan, determined by market conditions at time of rate lock (Rate lock good faith deposit is 1.00% and is refunded at closing Current rate + 2.7-3.5% |
| Amortization | Full |
| Prepayment | 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 |
| Mortgage insurance premium | 1% due to HUD at closing and 0.6% annually thereafter, escrowed monthly (0.25%-0.35% for affordable and subsidized properties, 0.25% for Energy Star certified properties) |
| Fees | 1% |
| Recourse | Typically non-recourse with standard carve-outs for multifamily, partial or full recourse may be required for other property types |
| Timeline | Typical firm application is submitted within 40-60 days of engagement; HUD then has a target of 60 days to issue Firm Commitment; Closing normally occurs 30-45 days thereafter |
Bridge to HUD
Brick Street Capital experienced in providing innovative short-term loans, while considering the big picture and long-term financial needs of the client. With our bridge-to-HUD solutions, borrowers receive up to three years of bridge financing and gain the opportunity to prepare their properties to meet the requirements of receiving permanent financing. If the property qualifies for an FHA/HUD loan, we help ensure that this process is a seamless transition.
| Property Type | Multifamily, Assisted Living, Skilled Nursing, Retail, Mixed-Use and Office properties Flexible criteria ranging from lease up and value-add acquisitions to equity recapitalizations |
| LTV | Up to 90% Loan-to-Cost and 80% of Stabilized Value |
| Term | Up to 36 months including extension options |
| Rate | 3-9% |
| Amortization | Interest Only |
| Prepayment | Waived if permanent financing is provided by BSC |
| Security | First mortgage lien and assignment of rents required Single-purpose entities and Tenants in Common Right of first refusal to provide permanent financing |
| Fees | 1% |
| Recourse | Typically non-recourse with standard carve-outs for multifamily, partial or full recourse may be required for other property types |
| Guarantors | Required to meet net worth and liquidity dependent on transaction size |