FHA 223(f) Multifamily Acquisition and Refinance

INTEREST RATE: Fixed rate locked at firm commitment. GNMA market rates fluctuate daily.

AMORTIZATION: Fully amortizing, 35-year schedule (not to exceed 75% of remaining economic life).

LOAN SIZE: $2,000,000 minimum loan amount, no maximum. Funding by lender at best available rates.

MAXIMUM LOAN:

• Acquisition - lesser of:
  • 85% of total acquisition costs including repairs, reserve deposits, fees, costs, etc.
  • (not to exceed 85% of HUD approved appraised value) (90% for non-profits)
  • 85% of NOI divided by mortgage constant (1.175 DSC) (90% for non-profits)

• Refinance - lesser of:
  • 85% of HUD approved appraised value (90% for non-profits)
  • 85% of NOI divided by mortgage constant (1.175 DSC) (90% for non-profits)
  • 100% of total refinancing costs including repairs, reserve deposits, fees, costs, etc.
  • 70% of appraised value for "cash out" transactions

ESCROWS: Replacement reserves, property taxes, property insurance, and mortgage insurance premiums.

REPAIR ESCROW: HUD required repairs, if applicable, are funded in mortgage proceeds. An additional 50% escrow funded with cash or letter of credit. A latent defects escrow of ½% will remain for 24 months.

REPLACEMENT RESERVES: Initial deposit to replacement reserves can be funded in mortgage, amount based on A&E report/condition of property. On-going deposits made at approximately $225/unit/year based on condition of property.

ASSUMPTION: Assumable for .10% fee and permission of HUD.

PREPAYMENT: Prepayment penalties negotiable. Typically 5yr. Lock, then 5%, 4%, 3%, 2%, 1%, then par.

LOAN FEES: 1%-3½% inclusive fee to Lender based on loan size/complexity. HUD non-refundable processing fee of .3% payable upon submission of application to HUD. Processing fee of $5,000.

OTHER COSTS / USES OF FUNDS:

1. Mortgagee's legal fees ($7,500)
2. Title, survey, recording fees, and other closing costs
3. Appraisal and engineering reports for FASTRACK processing ($7,500 est.)
4. 1.0% first year MIP
5. GNMA Indemnification Escrow (if required)
6. Initial deposit to replacement reserves up to $1,000 to $1,500 per unit based on property condition

PROCESSING TIME: Eagle Point and HUD employ FASTRACK Processing. HUD estimates 60-90 days from receipt of Firm Application to Firm Commitment. Processing time varies in different HUD offices & workloads.

To produce a loan quote and issue an engagement letter, we require the following:

1. Project Summary / property & location description with photos and maps
2. Current rent roll and summary of 3-year occupancy history
3. Three (3) years and YTD operating statements
4. Description of borrower, including experience and financial strength of principals
5. Summary of existing debt and history of property financing
6. Proposed use of mortgage proceeds / purpose for new financing