HUD multifamily lenders, like most of our conventional lending colleagues, underwrite deals based on metrics like loan-to-cost (LTC), loan-to-value (LTV) and debt service coverage (DSC).
We borrowed – and slightly amended – that classic line from Blazing Saddles, and before that, The Treasure of the Sierra Madre, to make this point.
HUD-insured multifamily construction loans offer terrific terms: 40 year amortization, high loan-to-cost ratios, low debt service coverage ratios and non-recourse provisions.
The HUD Section 221(d)(4) program provides high leverage, long-term, fixed-rate multifamily financing – 85% of cost and a 40-year amortization. Debt service coverage requirements are a modest 1.17, loans are assumable, and did we mention they also are non-recourse?
HUD recently announced that it will be offering lower MIPs for healthcare loans starting on or about October 1, 2022, the start of the new Federal fiscal year.