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Purpose Provides mortgage insurance for existing apartment projects to facilitate either the refinancing or purchase of projects at least three years old. Available for profit motivated or non-profit borrowers.
 
Eligible Borrowers Profit motivated, non-profit motivated and public owners are eligible
 
Maximum Term 35 years, not to exceed 75% of remaining economic life
 
Maximum Loan Refinancing the lesser of:
  1. The amount that can be supported by 85% of net operating income;
  2. 100% of the cost of refinancing, not to exceed 85% of value; or
  3. 80% of value in the case of an equity takeout.
 
Acquisition the lesser of:
  1. 85% of acquisition cost (i.e., total cost to close);
  2. 85% of value; or
  3. the amount that can be supported by 85% of stabilized net operating income. (Potentially, a surplus cash note for 7.5% of the acquisition cost can be utilized, thereby increasing the amount financed to 92.5%)
 
Personal Liability None
 
Mortgage Insurance Premium 1.00% for the first year (payable at closing) and thereafter 0.45% of the outstanding loan amount.
 
Secondary Financing Surplus cash notes are permitted, up to 7.5% of the project’s value or unlimited if public financing.
 
Repairs/Replacements Funds for repairs, deferred maintenance and capital improvements for up to 15% of value or approximately $15,000/unit can be included in the loan amount, subject to the 85% loan to value limitations.
 
Funding Qualifies for government insured mortgage-backed securities or direct placement or may be used to credit-enhance tax-exempt bonds.
 
Prepayment Typically closed for two years then open to prepayment at 8% in year three, declining 1% per year.
 
Interest Rate Subject to market conditions.
 
Financing Fee Negotiable