HUD Multifamily Loans
NorthPoint Capital, L.L.C. is an FHA Approved Title II Multifamily Lender providing permanent and construction loans for apartment properties primarily in the midwest.
NorthPoint Capital is an FHA Approved MAP (Multifamily Accelerated Processing) Lender, which allows us to provide our borrowers with the most efficient processing and approval timeframes available for HUD loans.
There are a number of different HUD loan programs providing for new construction financing, substantial rehabilitation of existing apartments, senior housing, and other programs. In today's market, the most commonly used program is the FHA 223(f) program, which is described below. For information on other HUD programs, please contact NorthPoint Capital personnel.
Through the FHA 223(f) Mortgage Insurance Program, NorthPoint Capital provides long-term, fixed rate, non-recourse financing for acquisition or refinance of existing multifamily rental housing.
Loan Features
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Eligible Property: | Existing multifamily projects at least three years old
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Eligible Borrower: | Single Asset Entity (for profit or non-profit)
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Recourse: | Fully Non-recourse
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Term & Amortization: | Up to 35 years fully amortizing, not to exceed 75% of remaining economic life
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Maximum Loan: | Refinance: The lesser of:
1. The amount supported by 1.20 debt coverage (83.3% of the NOI)
2. 83.3% of HUD appraised value (80% if cash out)
3. The greater of 80% of HUD appraised value or 100% of
the total cost to refinance, including existing debt
the total cost to refinance, including existing debt
4. Statutory mortgage limits
Acquisition: The lesser of:
1. 83.3% of acquisition costs
2. 83.3% of HUD appraised value
3. The amount supported by 1.20 debt coverage (83.3% of the NOI)
4. Statutory mortgage limits
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Interest Rate: | Fixed rate for the entire term is determined by market conditions at the time of rate lock
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Prepayment: | Typically closed for 2 years then open to prepayment at 108% in year 3, declining 1% per year. No penalty after ten years. Other variations are available based on market conditions and borrower preferences.
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Mortgage Insurance
Premium (MIP): | MIP is 1.0% at closing (year one pre-paid) and 0.45% annually thereafter
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Escrows: | Property Tax, Insurance, and MIP required
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Replacement Reserves: | Initial and ongoing monthly deposits required based on long term Property Capital Needs Assessment (PCNA)
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Repairs/Improvements: | Improvements and/or required repairs cannot exceed $6,500/unit multiplied by the high-cost factor for the area, limited to one major component, and a maximum 15% of improved market value. Repair funds are escrowed at 120% of estimated cost.
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Commercial Space: | Eligible for up to 20% of total square footage and 20% EGI
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Occupancy: | Average six months physical occupancy rate of at least 85%. Underwritten up to 93% occupancy.
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Origination Fee: | Fees negotiable
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Placement Fee: | Fees negotiable
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HUD Application Fee: | 0.3% of the loan amount
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HUD Inspection Fee: | Greater of 1% of the estimated cost of repairs or $30 per unit
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NPC Processing Fee: | $5,000 to $10,000
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Third Party Reports
Expense Deposit: | Estimated at $17,500 for appraisal, Phase I Environmental analysis, and Property Capital Needs Assessment (PCNA)
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Legal Fees: | Lender legal fees estimated at $17,500
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Secondary Financing: | Limited secondary financing is permitted
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Assumability: | Assumable subject to HUD and Lender approval
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