Acquisition Construction Financing
FHA SECTION 223(a)(7)
Refinancing of properties currently subject to FHA insured project loans. Applies to all of the FHA loan programs including multifamily housing, elderly housing, nursing homes, assisted living facilities and hospitals.
PROGRAM FEATURES
- Provides expedited processing procedures.
- No required property inspection or analysis by FHA.
- No appraisal.
- Requires a 1.05x debt service coverage for non-profit facilities and 1.11x debt service coverage for for-profit facilities.
- Limited environmental review pertaining to projects involving capital improvements only.
- Loans funded with tax-exempt bonds or Government National Mortgage Association (GNMA) Securities.
- The mortgage term may be extended 12 years beyond the term of the current FHA mortgage, with HUD’s approval, to a maximum of 40 years.
FEES
0.3% Application Fee to FHA. Half of this fee will be refunded to the mortgagor after closing.
0.5% Mortgage Insurance Premium (0.45% for apartment deals and all deals involving low income housing tax-credits)
No Inspection Fee
2.0% Maximum Financing Fee
2.0% Costs of Issuance for Bond Transactions
An annual Mortgage Insurance Premium (0.45% for apartment deals and all deals involving low income housing tax-credits). In general, no additional fees should be required for third party reports.
ESCROWS
- Full escrows required for property insurance, real estate taxes, and FHA mortgage insurance premium. These should be similar to what is currently being paid.
- Replacement reserve escrow for on-going replacement of depreciable items is required for the term of the loan. These should be similar to what is currently being paid.
