Effective today, HUD has reduced mortgage insurance premiums (MIPs) across the board for their multifamily mortgage insurance programs to .25%.
MIPs for market-rate Section 223(f) acquisition/refinance loans and Section 221(d)(4) construction loans were .60% and .65%, respectively. MIPs for Section 241(a) supplemental loans were .95% but also have been reduced to .25%.
The lower MIPs automatically create additional borrowing capacity for all multifamily programs. How much? Based on current interest rate conditions and standard amortization provisions, a Section 223(f) loan will yield an additional $103,000 per $150,000 in net operating income (NOI) with the lower MIP.
A Section 221(d)(4) loan will yield an additional $111,500 per $150,000 in NOI and the grand prize goes to Section 241(a) loans, which will yield an additional $173,000 per $150,000 in NOI. Not sure what a Section 241(a) loan is? It is a great way to finance an expansion or renovation of a project with a HUD-insured loan already in place – contact us for additional information!
Not sure what a Section 241(a) loan is? It is a great way to finance an expansion or renovation of a project with a HUD-insured loan already in place – contact us for additional information!
