In a fluctuating economy, securing financing for large-scale multifamily projects is becoming increasingly challenging. The Department of Housing and Urban Development (HUD) supports the development of multifamily communities through FHA mortgage insurance programs. These types of loans are backed by the federal government, providing more stability and lower risk of default. Below, we’re chatting about the highlights of HUD financing and why a developer should consider pursuing it.
What is HUD? HUD’s mission is to create strong, sustainable, inclusive communities and quality affordable homes for all.
Advantages of HUD:
- Favorable interest rates and leverage
- Non-recourse
- Fully amoritizing
- Negotiated prepayment penalties
- Assumability
Basic Requirements:
- Over 5 units
- Minimum 85% occupancy
- Single asset entity borrower
- Standard non-recourse carve outs
- Mortgage insurance premium
We hosted a webinar to talk about HUD financing alongside Lee Oller of Merchant’s Capital, Ted Waldron, an architect and third-party HUD plan reviewer, and Jesse Garland, a senior associate principal at KEPHART who has been managing HUD projects for more than five years. Watch below to learn more!
If you have questions about HUD financing or are interested in learning more, please contact us at 303-832-4474.
