Apartment properties which are at least 3 years old from the date of initial occupancy. Moderate rehabilitation is permitted.
The lesser of the following criteria:
85% of FHA appraised value;
1.17 debt service coverage;
Statutory unit mortgage limits.
The greater of: (a) the cost to refinance; or (b) 80% of value.
85% of the cost of acquisition.
Note: No change in mortgage criteria for non-profit ownership.
Fixed rate determined by market rates at the time of rate lock.
Up to 35-year, fully amortizing loan.
Assumable, subject to Walker Dunlop approval.
Allowable, subject to FHA criteria.
Repair program may not exceed the greater of 15% of the value after repairs, or $6,500 plus applicable high cost percentage per unit.
No more than one major building system can be replaced.
Davis-Bacon prevailing wage laws do not apply.
ANNUAL MORTGAGE INSURANCE PREMIUM:
1.0% of the mortgage amount is payable at closing. Thereafter, the MIP is escrowed monthly based on a rate established by FHA. The rate is fixed at loan endorsement.
Monthly escrows for property insurance, real estate taxes, reserves for replacement (as determined by FHA) and mortgage insurance premiums.
An initial deposit to replacement reserve and 100% of repair costs (both as determined by FHA) are escrowed from mortgage proceeds.
Commercial area shall not exceed 20% of the total net rentable area of the project and commercial income shall not exceed 20% of effective gross income.
Special rules apply for properties which are located in Flood Hazard Zones as designated by FEMA.
Lead-based paint and asbestos must be abated in accordance with FHA requirements.
A non-refundable fee of 0.3% of the requested mortgage amount is payable to FHA at the time of application, plus estimated underwriting costs for market study, appraisal, architectural/engineering report, cost analysis, environmental assessment and other loan processing costs.
FINANCING AND PLACEMENT FEES:
Standard transaction costs, including legal fees, title insurance and survey.
OTHER FHA REQUIREMENTS:
Cash escrows or letters of credit are required for the following:
20% of repair costs as a completion guarantee.
2.5% of repair costs as a latent defects guarantee, due at completion of repairs.
Forecasted operating deficits, (maximum of 18 months) to be released upon achievement of breakeven operations for 90 days.
FHA PROCESSING TIME:
One stage for FHA Multifamily Accelerated Processing (MAP) Procedures:
Firm Commitment Stage: 60 days for review.
PRELIMNARY SUBMISSION PACKAGE:
Include the following in your request for a loan quote:
- Property description and location map.
- Number of units with breakdown of proposed rents by unit type.
- Current rent roll and year-to-date operating statement.
- Operating history – prior 3 years, if available.
- Current year operating budget.
- Existing debt and purchase price.
- Sponsor resume.
This is a summary of general program terms, which are subject to change. This is not a commitment to lend.