FHA Mortgage Insurance Apartments - New Construction/Substantial Rehab Section 220, 221(d)(4), and 221(d)(3) Description Provides competitive financing for the new construction or substantial rehabilitation of multifamily and seniors (no services) properties. Benefits / Features Two-step processing under HUD’s Multifamily Accelerated Processing (MAP). Insured mortgages may be used to finance BOTH the construction and permanent loan of the properties. Limited commercial space and income may be included in the loan. No occupancy threshold required to close permanent loan. May also serve as credit enhancement for tax-exempt bond deals Loan Structure Loan Amount: 221(d)(4) or 220 -Lesser of: (i) Amount supported by 1.11 debt service coverage; (ii) 90% of costs; or (iii) Statutory unit limitations. 221(d)(3) - Lesser of: (i) 1.05 debt service coverage; (ii) 100% of costs for nonprofit Borrowers; or (iii) Statutory unit limitations. Loan Terms: 40 years, plus the construction period which is interest only. Amortization: Fully amortizing, 40 years for most properties. Recourse: Loans are nonrecourse. Rates: Ginnie Mae MBS and whole loan rates priced daily. Rate may be locked for both the construction and permanent loan anytime after Borrower’s acceptance of HUD’s Firm Commitment. Interest rate buy-downs available. Optional Features Assumability: Fully assumable with HUD’s and Lender’s consent. Prepayment: Any prepayment lock out or penalty periods negotiable with Investor. Requirements Initial deposit to the Replacement Reserve can be included in the mortgage; monthly deposits required. Single-asset Borrower entity. Comply with prevailing wage requirements under the Davis-Bacon Act. Application Fee: $2,500 non-refundable inspection/loan processing fee payable to American Trust Corporation with the loan application, will be credited to origination fee at closing Origination Fee: 1%
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