Apartments
Refinance & Acquisition without Substantial Rehabilitation |
Rockport Mortgage Corporation is an
FHA-approved Mortgagee and actively provides financing
utilizing the FHA insurance programs nationwide.
|
|
|
HUD
223(f) |
HUD
223(a)(7) |
| 
printer friendly version
|
printer
friendly version |
|
Purpose |
Provides
mortgage insurance for existing apartment projects to
facilitate either the refinancing or purchase of projects
at least three years old. |
Provides
mortgage insurance in connection with the refinance
of projects currently insured by FHA.
Available for profit motivated or non-profit borrowers. |
|
Eligible
Borrowers |
Profit motivated, non-profit motivated
and public owners are eligible. |
|
Maximum Term |
35
years |
May
not exceed the remaining term of the existing mortgage,
except in special cases where due to the project feasibility,
FHA may extend the new term up to 12 years beyond
the remaining
term of the original mortgage. |
| Maximum
Loan |
Refinance
The lesser of:
1) The amount that can be supported
by 85% of net operating income;
2) 85% of value; or
3) the greater of 80% of value or 100%
of the total cost of refinancing the existing indebtedness.
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. |
The
lesser of:
1) The original principal amount of
the existing insured mortgage.
2) The unpaid principle balance of
the existing insured mortgage plus the cost of required
Repairs, improvements, outstanding debt incurred in
connection with capital improvements, prepayment penalties,
and loan closing costs;
3)The amount that can be supported
by 90% of net operating income (95% if owner is non-profit) |
| Personal
Liability |
None |
None |
| Prepayment |
Typically
closed for two years then open to prepayment at 8%
prepayment fee in year three, declining 1% per year
thereafter. |
| FHA
Application
Fees |
0.3%
of the loan amount. |
0.3%
of the loan amount. At closing, HUD will approve reimbursement
up to one-half of the application fee. |
| Mortgage
Insurance
Premium |
1%
for the first year (payable at closing) and thereafter
0.45%
of the outstanding loan amount. |
.5% of
the outstanding loan amount. |
| Repairs
and
Replacements |
Funds
for repairs, deferred maintenance and capital improvements
for up to 15% of value or $6,500 per unit (may be adjusted
for high cost areas) can be included in the loan amount,
subject to the 85% loan to value limitations. |
None. |
Finance
Fee |
Negotiable |
Negotiable |
| Secondary
Financing |
Surplus
cash notes are permitted, up to 7.5% of the project's
value. |
None. |
| Funding |
Qualifies
for government insured mortgage-backed securities or
direct Placement or may be used to credit-enhance tax-exempt
bonds. |
Interest
Rate |
Subject
to market conditions. |
Subject
to market conditions. |
Territory |
Nationwide. |
Nationwide. |
| Additional
Parameters |
-
Properties at least three years old
(i.e. Certificates of Occupancy outstanding for
at least three years on the date of application);
-
A replacement reserve deposit will
be required at closing. The deposit can be capitalized
in the mortgage loan;
-
Per "MAP" (Multifamily
Accelerated Processing) Guidelines an application
can be processed in approximately 60 days from submission
of a complete package. It has been our experience
that several HUD offices are processing the loans
in less than 45 days.
|
-
The Program is available for fully
insured mortgages or coinsured mortgages that have
been converted to full insurance.
-
Funds to cover repairs and costs of
the transaction can be included in the mortgage
loan. Outstanding debt incurred in connection with
capital improvements already made to the property
may also be included in the mortgage loan, subject
to FHA approval.
-
The term of the new mortgage may
not exceed the remaining term of the existing
mortgage
though FHA may extend the new term up to 12 years
beyond the remaining term of the original mortgage
if it is
required for project feasibility.
-
Loans insured under 223(a)(7) assume
program characteristics of the underlying mortgage
insurance program.
-
Processing Section 223(a)(7) applications
usually takes 30-45 days.
|
 |
|
|
