Multifamily Housing - Refinance of existing FHA Commercial Loans: Section 223(a)(7)
Refinance of existing FHA Insured Loans
The 223 (a)(7) Program is insured by the Federal Housing Administration (FHA) and provides multifamily and affordable housing properties a simplified, limited due diligence refinance for properties currently insured under an existing FHA Mortgage insurance program. This streamlined program is designed for borrowers to lower their interest rate and strengthen their debt service coverage through mortgage refinance.
All borrowers with existing FHA mortgages may apply under this program.
HUD may approve a term of up to 12 years beyond the remaining term of the existing mortgage, not to exceed the original term. A term extension request must be supported by a determination of the remaining economic life of the property.
The lesser of: (1) Original principal amount of existing insured mortgage or (2) The unpaid principal amount of the existing insured mortgage plus loan closing charges (including prepayment penalties) associated with refinancing the mortgage, and costs of improvements, upgrades, or additions required to be made, as approved by HUD.
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.
Processing may be completed within 90 days from submission of an accepted final application. Application is streamlined resulting in reduced requirements.
None, FHA is non-recourse.
FHA application fee, inspection fee, lender fees and mortgage insurance premiums will be collected. Various third party reports may be required. All of these costs may be eligible for inclusion in the mortgage note and are reimbursable to client at closing.
- Replacement Reserve balance must be transferred in full at closing.
- Condensed list of exhibits for application submission, less than regular HUD application.
- Appraisal, Phase I Environmental Site Assessment and survey are NOT required in most instances.
- PCNA is required if one has not been completed within the past ten years or if seeking a term extension.
- Minimum Debt Service Coverage ratio of 1.11.
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.
“This was a challenging transaction due to a number of financing issues. The Oppenheimer Multifamily Housing & Healthcare Finance, Inc. team was able to put the financing in place and deliver significant debt service savings for us. We want to reiterate our appreciation for Oppenheimer’s assistance with this refinance. We were impressed with the team’s efficiency and professionalism, and look forward to working with Oppenheimer again in the future.”
Idahlia Renee Snell
Resource/Program Development Director
Amigos Del Valle, Inc.