223(a)(7) – Expedited Refinance of FHA-Insured Mortgages

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ELIGIBLE PROPERTIES:
Apartment or healthcare properties with mortgages that are currently insured by FHA. Moderate rehabilitation is permitted.

LOAN TYPE:
Fully amortizing permanent loan.

PREFERRED LOAN SIZE:
Any size insured mortgage is acceptable.

MAXIMUM LOAN:
The lesser of the following criteria:
The original principal amount of the insured mortgage(s).
90% of Net Income (after the subtraction of proprietary earnings for healthcare facilities), divided by the loan constant.
The existing indebtedness plus transaction costs.

INTEREST RATES:
Fixed rate determined by market rates at the time of rate lock.

AMORTIZATION:
The remaining term of the existing mortgage (FHA may approve a term up to 12 years beyond the remaining term up to the original maximum term of the currently insured mortgage).

PERSONAL RECOURSE:
Non-recourse.

ASSUMABILITY:
Assumable, subject to Walker Dunlop approval.

SUBORDINATE FINANCING:
Allowable, subject to FHA criteria.

WAGE REQUIREMENTS:
Davis-Bacon prevailing wage requirements do not apply.

ANNUAL MORTGAGE INSURANCE PREMIUMS:
The first year’s MIP is payable in advance of closing based on a rate established by FHA. Thereafter, the MIP is escrowed monthly. The rate is fixed at loan endorsement.

ESCROWS:
Monthly escrows for property insurance, real estate taxes, reserves for replacement, sinking fund (if applicable) 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.

ENVIRONMENTAL ISSUES:
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.

APPLICATION FEE:
An application fee of 0.3% of the requested mortgage amount is payable to FHA at the time of application. At the time of closing, FHA can refund half of the application fee.

INSPECTION FEE:
None required by FHA.

FINANCING AND PLACEMENT FEES:
Negotiable.

CLOSING EXPENSES:
Standard transaction costs, including legal fees, title insurance and survey.

OTHER FHA REQUIREMENTS:
Cash escrows or letters of credit are required for the following:
10% of repair costs as a completion guarantee.
2.5% of repair costs as a latent defects guarantee, due at completion of repairs.

FHA PROCESSING TIME:
One stage processing procedures:
Firm Commitment Stage: 30 days for review.

PRELIMINARY SUBMISSION PACKAGE:
Include the following in your request for a loan quote:

  • Property description and location map.
  • Last 6 months rent rolls and year-to-date operating statement.
  • FHA audits for prior 3 fiscal years.
  • Current year operating budget.
  • Statement of existing debt and escrow balances.
  • Sponsor résumé.

This is a summary of general program terms, which are subject to change. This is not a commitment to lend.