HUD Construction Financing
Top Five Reasons to Finance Your Construction Project Though HUD's Loan Programs. Many banks are stepping back from construction lending due to concerns about over-building and new regulations. HUD financing has always been an attractive option for many borrowers seeking funding for ground-up new construction. For borrowers that typically use banks as their debt source, HUD financing may now be the best option. 1. HUD financing for new construction provides an all-encompassing loan for construction and permanent financing. The low interest rate is locked in prior to construction. 2. HUD loan terms are more attractive than conventional financing. Loans are non-recourse and fully amortizing over 40 years. 3. Construction loans are interest only during the construction period. The lack of a balloon eliminates the borrower's interest rate risk exposure compared to a conventional construction/mini-perm. 4. Projects with an affordable component are looked at favorably by HUD. They can receive expedited processing and/or higher loan proceeds versus 100% market rate projects. 5. HUD recently announced reductions to MIPs for projects with a green component. This can save borrowers 40 basis points in the total rate. Partner with an experienced HUD lender: www.lovefunding.com/construction
