As an approved FHA MAP lender, DPMC can secure mortgage insurance through a variety of programs administered by the Federal Housing Administration (FHA) under the U.S. Department of Housing and Urban Development (HUD). This insurance allows DPMC to provide long term (in some cases, 40 years) low interest, fixed rate financing for building a new project, rehabbing an existing project, refinancing an existing project or property acquisitions. These loans are fully assumable and non-recourse.
What is the FHA Advantage?
Using FHA Mortgage Insurance has distinct advantages to the borrower:
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FHA will insure fixed rate loans for up to 40 years, allowing borrowers to amortize larger loans. |
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FHA will insure loans of up to 90% of value for profit motivated sponsors and up to 100% of value for non-profit sponsors. |
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Profit motivated sponsors may use up to 90% of net operating income to amortize an FHA loan, and non-profit sponsors may use up to 95% of net operating income, resulting in debt coverage ratios as low as 1.05. |
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Only federally insured (e.g., FHA) loans may be securitized (converted to marketable securities) through Ginnie Mae, the least expensive way to achieve a "AAA" bond rating. |
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FHA insured loans may be used for both construction and permanent financing. |
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FHA loans are non-recourse. |
M.A.P. Processing
The U.S. Department of Housing and Urban Development (HUD) has a program called Multifamily Accelerated Processing (M.A.P.), which will expedite processing and enable the HUD Insurance Programs to be more competitive with conventional financing timeframes.
The M.A.P. processing guidelines allow the HUD approved Lender to contract and facilitate all third-party reports (Environmental, Appraisal, Architectural & Engineering Review and Construction Cost Analysis).
Using the third-party reports, the Lender will complete the technical processing and make underwriter recommendations. The Underwriter's Summary is combined with the required documentation and submitted as a formal Application to the local HUD office.
The Multifamily Accelerated Processing Program is available for the 221(d)4 or (d)3, 223(f), 223(f)/202, 242 and 232
LEAN Programs
Initial Information Requirements
DPMC provides free preliminary loan analyses and can respond with a loan proposal within 48 hours of receiving the following:
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Copies of the last three annual financial statements & current interim statement |
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Existing indebtedness or acquisition price |
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Copy of current rent roll |
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Schedule of units showing number of bedrooms & baths, floor areas, current rates, lease start and end dates, employee units and street rents. |
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Photos of the property, available market information, demographics, location map or a recent appraisal, if available. |
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Proposed repairs and/or recently completed capital improvements |
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Proposed Sources & Uses of Funds statement, including any financing commitments in place and a detailed breakdown of hard and soft project costs. |
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Construction projects also require an operating pro forma, a summary of the scope of work, its estimated cost and duration. |
If FHA is not the most appropriate program, DPMC will suggest alternative ways to fund the transaction, and may be able to offer bridge, construction, and/or permanent loans for that purpose through conduit, private investors or other conventional means.
Click here to see a PDF file sampling our underwritten and closed multifamily loans.
