HUD 221(d)(4) Loan for Multifamily Construction

HUD 221(d)(4) Requirements and Guidelines

For New Construction or Substantial Rehabilitation of Multifamily Properties

  • Loan Sizes:  $10,000,000 minimum, Unlimited Maximum
  • Loan Modification Allowed to Lower Rate if Rates Come Down
  • Mixed Use:  25% Commercial Space Allowed
  • Loan to Cost: 85% Market Rents, 87% Affordable Rents, 90% Subsidized Rents
  • Up to 3 years on Construction Loan
  • 40-Year Fixed Rate on Permanent Loan at the same rate as the construction loan
  • 40-Year Term and Amortization on Permanent Loan
  • 1.176 DSCR  - Market Rents,1.15  - Affordable Rents, 1.11 – Subsidized Rents
  • Non-Recourse
  • No Tax Returns
  • No Debt to Income or Global Ratio for Borrower
  • Assumable with a .50% fee
  • Loan Fee: 1 – 2%
  • HUD Approval Fee: .30%
  • HUD Exam Fee: .40%
  • Mortgage Insurance Monthly: .25% for Green, .60% for Standard Properties
  • Replacement Reserves Required Monthly for Future Repairs and Replacements
  • Current Multifamily Ownership Experience Required
  • Current Multifamily Development Experience Required
  • Any size Market Okay
  • Good Credit Required
  • No Minimum Net Worth Requirement
  • >Declining Prepayment Penalty 1st 10 years
  • Rate Lock at Loan Approval
  • 9 – 10 Months for Closing

For more information please see HUD 221(d)(4) Loans