Purchase or Refinance
Section 223(f)
35-year term
Value for affordable and Section 8 projects is determined without using restricted rent
Minimum DSC ratio
1.176 for market rate projects
1.15 for affordable projects
1.11 for Section 8 projects
Maximum LTV ratio
80% with cash out proceeds
85% for market rate projects
87% for affordable projects
90% for Section 8 projects
New Construction or Substantial Rehabilitation
Section 221(d)(4)
One fixed interest rate
for entire construction period and 40-year term
Minimum DSC ratio
1.176 for market rate projects
1.15 for affordable projects
1.11 for Section 8 projects
Maximum LTC ratio
85% for market rate projects
87% for affordable projects
90% for Section 8 projects
Builder and Sponsor's Profit and Risk Allowance (BSPRA) allows for even higher proceeds.
Streamlined Refinance of Existing HUD-insured Mortgages
Section 223(a)(7)
Lock in lower interest rates
Low cost
Fast process
Existing prepayment penalty can be covered by principal increase and new interest rate
Potential term extension up to 12 years
No cash-out proceeds
1.11 DSC ratio for market rate
1.05 for Section 8
To qualify as affordable in this context,
a project must meet the following requirements:
Rent and income restrictions must be imposed, monitored, and enforced by a governmental agency for at least 15 years after Final Endorsement,
There must be a recorded Regulatory Agreement (LURA) requiring the project to meet at least the minimum LIHTC restrictions of 20% of units at 50% of area median income (AMI), or 40% of units at 60% of AMI, with economic rents (i.e. the portion paid by the residents) on those units no greater than LIHTC rents, and
The achievable tax-credit rents must be at least 10% below market rents.
To qualify as Section 8 in this context, a project must have a project-based Section 8 contract for 90% or more of the total units in place for 15 years after Final Endorsement.
Business services and products do not originate from and are not expressly endorsed by HUD, FHA, the government of the United States, or any federal, state or local government agency. Harper Capital Partners, LLC, is not acting on behalf of or at the direction of HUD, FHA, or the federal government.