FHA Section 223(f)
Mortgage Insurance for Affordable Housing Projects
Acquisition or Refinance
The 223(f) Program features: high leverage, fixed rate, long-term, self-amortizing, non-recourse, assumable, first lien mortgage debt for the acquisition or refinance of affordable housing properties. The program is insured by the Federal Housing Administration and provides access to affordable financing for capital needs nationwide.
- Minor repairs (not to exceed the greater of $6,500/unit times the area high cost factor, or 15% of the “as-improved” market value) may be included in the loan amount.
- At least three years shall have passed since original Certificate of Occupancy was granted.
- Property must have economic occupancy rate of 85%.
Single Asset Entity, for-profit, not-for-profit, and municipally-owned
The lesser of 35 years, or 75% of the remaining economic life, as determined by appraisal.
Refinance Transactions: Lesser of: 85% for affordable (83.3% for market rate) of the HUD appraised value of the physical improvements, debt service coverage at 1.176:1, or up to 100% of the sum of outstanding indebtedness plus transaction costs, or 80% if cash out.
Acquisition Transactions: (1) Market Rate, lesser of: 83.3% of HUD appraised value, or 83.3% of the acquisition price plus transaction costs, (2) Affordable, lesser of 85% of HUD appraised value, or 85% of the acquisition price plus transaction costs, (3) Subsidized, lesser of: 87% of HUD appraised value, or 87% of acquisistion plus transaction costs, and minimum debt service coverage ratios must be met.
Fixed interest rate, subject to market conditions
Qualifies for Ginnie Mae government guaranteed mortgage-backed securities, direct placement or may be used to credit enhance tax-exempt or taxable bonds.
HUD processing involves a one-step application submission.
None, FHA is non-recourse.
FHA application fee, inspection fee, lender fees, and mortgage insurance premiums will be collected. Various third party reports are required. All of these costs may be eligible for inclusion in the mortgage note and are reimbursable to client at closing.
- Client pays for all third party reports which include a market study, full appraisal, engineering report, architectural report, a seismic report, if applicable, and environmental studies as well as legal and organizational costs.
- Surplus cash may be distributed twice per year.
- Annual audit of operations required to be submitted to HUD & lender.
- Repairs/replacements are limited to one major building component.
- Future access to supplemental loans via FHA 241.
This is a general outline of the program requirements. For complete information and to determine how your property can benefit from this accelerated financing opportunity, please contact your Oppenheimer representative at [email protected], or call (215) 631-9151.
“As a not for profit senior independent housing project that was originally built in 1984 and is HUD insured, we felt it crucial for our strategic plan to refinance our mortgage while interest rates were low. We immediately went to Oppenheimer’s Bob Corp. We knew through vast professionals who we work with closely, that Oppenheimer Multifamily & Healthcare Finance, Inc. was well versed in refinancing concurrently working with HUD and their regulations. Although it was an arduous process, Oppenheimer was able to work with all the disciplines and create a refinancing package that extended our mission of serving seniors in a gracious living environment for decades to come. It was a joy to work with this group! I wish I had another facility to refinance! Financing completed October 1. 2013.”
Rev. Carol D. Jubenville
The Community at Sunset Wood