OVERVIEW OF HUD MORTGAGE INSURANCE PROGRAMS

The HUD mortgage insurance programs are available to for-profit, non-profit and public owners. These programs provide long-term, fixed rate, non-recourse financing for the following:

Section 207: New Construction or Substantial Rehabilitation for Multifamily Manufactured Home Parks.

Section 220: New Construction or Substantial Rehabilitatin for Apartments in Urban Renewal Areas (only).

Section 221(d): New Construction or Substantial Rehabilitation of Apartments in All Areas.

Section 223(f): Acquisition or Refinance of Apartments.

Section 232:  New Construction or Substantial Rehabilitation of Intermediate Care and/or Skilled Care Nursing Facilities, Assisted Living and/or Personal Care Facilities (Board and Care Facilities).

Section 232 pursuant to Section 223(f):  Acquisition or Refinance of Intermediate Care and/or Skilled Care Nursing Homes, Assisted Living and/or Personal Care Facilities (Board and Care Facilities).

Section 223(a)(7):  Refinance of Existing FHA Insured Mortgage Loan (to Reduce the Interest Rate and Pay Associated Costs).

Section 241:  Supplemental Loan Program for Renovation or Expansion of Existing FHA Insured Apartments, Nursing Facilities, Assisted Living Facilities and Personal Care Facilities.

Section 242: New Construction or Substantial Rehabilitation of Acute Care Facilities Including Critical Access Hospitals.

Description

     HUD will insure mortgages to finance the acquisition, new construction, substantial rehabilitation and refinance of multifamily and healthcare properties nationwide. 
     Loan commitments can be funded on a taxable basis or used as credit enhancement for tax-exempt bond issues. 
     Properties insured by HUD can be either "market" rate (i.e. not subsidized), affordable housing, or low income housing. HUD does not require low income tenancy set-asides nor does it impose rent limits on insured properties (however, the use of tax-exempt bonds or low income housing tax credits can trigger these requirements).

Special Program Features:                                            
     Construction and Permanent Financing Available.

     Non-Recourse (HUD Takes a First Mortgage Lien). 
     Assumable, Mortgage Loan
     Mortgage Loan and Amortization Term 
          Refinance/Acquisition - 35 Years
          New Construction/Substantial Rehabilitation - 40 Years
     Loan To Value Ratio
          83.3% to 90% (Refinance/Acquisition)
          83.3% to 95% (New Construction/Substantial Rehabilitation)
     Debt Service Coverage Ratio
          Refinance/Acquisition - 1.11% to 1.20%
          New Construction/Substantial Rehabilitation - 1.11% to 1.20%
         
         

"Terms outlined above reflect Notice H 2010-11 (HUD Multifamily Risk Mitigation) issued on July 6, 2010"