Multifamily
Bridge-to-HUD Financing
Short-term bridge debt from Harper's capital partners, structured from the start for a Harper HUD take-out. Close in 30 to 60 days, stabilize or complete the property, then refinance into a 35-year fixed-rate, non-recourse Section 223(f) loan, or a Section 221(d)(4) loan for land.
Key terms
Bridge programs
Every program is underwritten to a Harper HUD exit: Section 223(f) for existing and newly completed properties, Section 221(d)(4) for land.
| Program | Use | Loan Size | Spread over SOFR | Max Leverage |
|---|---|---|---|---|
| Bridge: Class A | Acquisitions, refinances, recapitalizations, lease-up (including pre-TCO) and light value-add | $25MM to $200MM | 2.50% to 2.75% | 80% LTV |
| Bridge: Class B/C | $25MM to $200MM | 2.75% to 3.25% | 80% LTV | |
| Opportunistic Bridge | Heavy value-add, transitional assets and quick closings | $25MM to $150MM | From 3.50% | 75% LTV |
| Construction | Ground-up, midstream and conversions | $25MM to $150MM | 4.00% to 5.25% | 82.5% LTC |
| Land / Pre-Development | Infill sites in the top 25 MSAs, carried to Section 221(d)(4) Initial Endorsement | $20MM to $50MM | From 6.00% | 60% LTV |
How the take-out works
1
Size the exit first
We size the HUD take-out from your pro forma before the bridge closes, so the bridge is underwritten to a permanent loan that works.
2
Close the bridge
Our capital partners close in 30 to 60 days on an acquisition, refinance, lease-up, construction or land position.
3
Refinance into HUD
A completed property can submit for a 223(f) once it achieves HUD's required DSCR for one full month after the final Certificate of Occupancy. The exit fee is waived when Harper provides the take-out.
Important to note
- The HUD take-out is fixed-rate, fully amortizing and non-recourse. A market-rate 223(f) sizes at up to 87% LTV (80% with cash out) and 1.15 DSCR, with a 35-year term and 0.25% MIP.
- Bridge debt placed within a year of the HUD application counts in the 223(f) refinance only if it funded an arm's-length acquisition, construction or capital improvements, or retired maturing debt that did.
- Land loans carry the site to 221(d)(4) Initial Endorsement; no construction may start before Initial Endorsement without HUD early-start approval.
- Escrows for taxes, insurance and critical repairs, and an interest reserve where coverage requires one.
- Guarantors must meet net worth and liquidity requirements based on loan size.
- Borrower pays a 1.00% finance fee plus third-party report and transaction costs.
Common questions
Who provides the bridge loan?
Harper's capital partners fund the bridge, subject to their credit approval. Harper arranges it and provides the HUD take-out.
Is there an exit fee?
1.00% of the loan amount, waived when Harper provides the HUD take-out.
How soon can a new property refinance into a 223(f)?
Once it has a final Certificate of Occupancy and has achieved HUD's required DSCR for one full month. Additional conditions apply until it has 3 years of operating history.
What loan sizes do you arrange?
$20MM to $200MM, depending on the program.
Send us the rent roll, T-12 and pro forma, or the budget and pro forma for construction, and we'll size the bridge and the HUD take-out together.
Bridge financing is provided by Harper's capital partners, subject to credit approval. Terms are indicative, not a commitment to lend. See also: HUD 223(f) vs. Agency vs. Bank.