Supplemental Mortgage Insurance for HUD-Insured Multifamily Loans
Secondary financing for improvements or additions to properties with a HUD-insured first mortgage in need of
repairs, substantial rehabilitation, or additional units.
Single asset and single purpose entity, either for-profit or non-profit.
The maximum loan amount will be the lesser of:
a) 90% LTV
b) 90% LTC
c) Minimum DSCR of 1.11x (combined first and second mortgages)
d) HUD statutory per unit limitations
If the existing loan has more than 25-years of amortization remaining, the term is generally coterminous with the first FHA-insured mortgage. If the remaining term is less than 25-years, the supplemental loan will have an amortization period of up to 40-years; as long as the term is no greater than 75% of the project’s remaining economic life.
Fixed for the term of the loan and determined at time of rate lock.
Maximum loan amount will be the lesser of:
a) 0.95% for Market Rate
b) 0.35% for Affordable
c) 0.25% for Broadly Affordable or Green Properties
Non-recourse during both construction & permanent phases of financing.
Fully assumable, subject to HUD approval.
Negotiable; 0-1 Year lockout, with a declining 1% per year penalty, open after year 10 with no yield maintenance or defeasance. Depending on market conditions, other pre-payment options are available.
Market Study, Appraisal, Environmental Report and PCNA or AEC Review (as applicable - if major building changes are made to the project).
The supplemental loan will not require a second reserve escrow. However, it will require a new analysis of the existing reserves for replacement in place for the first FHA-insured mortgage. This new CNA assessment will determine the needs for the existing project along with any new additions from the supplemental loan.
Federal prevailing wage & reporting requirements.
$3 per $1,000 of the requested mortgage (1/2 required at Pre-Application) or $2 per $1,000 for OZ.
$3 per $1,000 of the requested mortgage (1/2 required at Pre-Application) or $2 per $1,000 for OZ.
Typically 0.5% of mortgage amount, refunded at closing.
Secondary financing for improvements or additions to properties with a HUD-insured first mortgage in need of
repairs, substantial rehabilitation, or additional units.
Single asset and single purpose entity, either for-profit or non-profit.
The maximum loan amount will be the lesser of:
a) 90% LTV
b) 90% LTC
c) Minimum DSCR of 1.11x (combined first and second mortgages)
d) HUD statutory per unit limitations
If the existing loan has more than 25-years of amortization remaining, the term is generally coterminous with the first FHA-insured mortgage. If the remaining term is less than 25-years, the supplemental loan will have an amortization period of up to 40-years; as long as the term is no greater than 75% of the project’s remaining economic life.
Fixed for the term of the loan and determined at time of rate lock.
Maximum loan amount will be the lesser of:
a) 0.95% for Market Rate
b) 0.35% for Affordable
c) 0.25% for Broadly Affordable or Green Properties
Non-recourse during both construction & permanent phases of financing.
Fully assumable, subject to HUD approval.
Negotiable; 0-1 Year lockout, with a declining 1% per year penalty, open after year 10 with no yield maintenance or defeasance. Depending on market conditions, other pre-payment options are available.
Market Study, Appraisal, Environmental Report and PCNA or AEC Review (as applicable - if major building changes are made to the project).
The supplemental loan will not require a second reserve escrow. However, it will require a new analysis of the existing reserves for replacement in place for the first FHA-insured mortgage. This new CNA assessment will determine the needs for the existing project along with any new additions from the supplemental loan.
Federal prevailing wage & reporting requirements.
$3 per $1,000 of the requested mortgage (1/2 required at Pre-Application) or $2 per $1,000 for OZ.
$3 per $1,000 of the requested mortgage (1/2 required at Pre-Application) or $2 per $1,000 for OZ.
Typically 0.5% of mortgage amount, refunded at closing.
