APARTMENT PROPERTIES REFINANCE OR PURCHASE 

Eligible Properties:

Apartment properties which are at least 3 years old from the date of initial occupancy. Moderate rehabilitation is permitted

Loan Type:

Up to 35 year, fully amortizing permanent loan
 

Maximum Loan:

The lesser of the following criteria: 

  1. 85% of HUD appraised value;
  2. 1.17 debt service coverage
  3. Statutory unit mortgage limits

    Refinance Transaction:
  4. The greater of: (a) the cost to refinance; or (b) 80% of value

    Purchase Transaction:
  5. 85% of the cost of acquisition  

Note: No change in mortgage criteria for non-profit ownership 
 

Interest Rates

Fixed rate determined by market rates at the time of rate lock
 

Amortization:

Up to 35-year, fully amortizing loan
 

Personal Recourse:

Non-recourse
 

Assumability:

Assumable, subject to CWCapital approval 
 

Subordinate Financing:

Allowable, subject to HUD criteria
 

Prepayment: Negotiable
 

Repairs:

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
 

Wage Requirements:

Davis Bacon prevailing wage laws do not apply
 

Annual Mortgage Insurance Premium:

0.5% of the average principal balance (escrowed on a monthly basis). In addition, 1.0% of the mortgage amount is payable at closing
 

Escrows:

Monthly escrows for property insurance, real estate taxes, reserves for replacement (as determined by HUD) and mortgage insurance premiums  An initial deposit to replacement reserve and 100% of repair costs (both as determined by HUD) are escrowed from mortgage proceeds 
 

Commercial Space:

Commercial area shall not exceed 20% of the total net rent able area of the project and commercial income shall not exceed 20% of effective gross income
 

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 HUD requirements

Application Fee:

A non-refundable fee of 0.3% of the requested mortgage amount is payable to HUD 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: Negotiable

 

Closing Expenses:

Standard transaction costs, including legal fees, title insurance and survey
 

Other HUD Requirements:

Cash escrows or letters of credit are required for the following:

  1. 50% of repair costs as a completion guarantee
  2. 2.5% of repair costs as a latent defects guarantee, due at completion of repairs
  3. Forecasted operating deficits, (maximum of 18 months) to be released upon achievement of breakeven operations for 90 days

HUD Processing Time:

One stage for HUD Multifamily Accelerated Processing (MAP) procedures: 

1. Firm Commitment Stage: 60 days for review

Preliminary Submission Package:

Include the following in your request for a loan quote:

  1. Property description and location map
  2. Number of units with breakdown of proposed rents by unit type
  3. Current rent roll and year-to-date operating statement
  4. Operating history Ð prior 3 years, if available
  5. Current year operating budget
  6. Existing debt and purchase price
  7. Sponsor resume
 
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