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Eligible Proposals: |
Proposed new construction, substantial repair and rehabilitation of existing dwelling units and facilities.
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Loan Term: |
Up to a 40-year term / amortization.
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Loan to Value Ratio:
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New construction:
83.3% to 90% of estimated construction cost plus land value fully improved.
Substantial rehabilitation:
83.3% to 90% of estimated rehabilitation cost plus the as-is value of the project.
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Project Rents: |
No rent control - underwritten utilizing market comparables.
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Project Financing: |
Program provides for construction financing which converts to a permanent loan.
Short-term loan: covers costs incurred during the construction period.
Permanent loan: repays the construction loan and provides the long-term project financing.
FF & E: reasonable costs may be
included.
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Assurance of Completion: |
Corporate surety bonds for payment & performance in the amount of 100% of the construction or rehabilitation cost. Alternatively, a cash deposit or letter of credit in the amount of 15% of construction or rehabilitation cost is acceptable (25% for elevator buildings of 4 stories or more).
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Project Reserve: |
Will establish a reserve fund for replacements as part of the permanent loan.
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Secondary Financing: |
Secondary financing from federal, state or local agencies is permitted, but must be fully subordinated to the HUD insured loan and repaid from cash flow.
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