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Refinancing a HUD Multifamily Loan
- 1. Options for Refinancing a HUD Loan Loan Modification vs. 223(a)(7) Upfront Deposit Additional Fees Required prior to Close Lender Maximum Term Max Loan Amount Timing Cash at Close Pros Timing Ease of completion Minimal HUD approvals Ability to lower R4R annual deposits based on new HUD analysis MIP lowered for affordable projects Term extension can lower debt service payments further Repairs can be included in mortgage Prepay penalty can be included in transaction costs Cons Cannot capture new affordable MIP rates No reduction in annual R4R, but HUD may require increase No repairs allowed Prepay penalty factored into spread; rate may be higher than 223a7 Longer process Contact: Gemma Geldmacher gemma.geldmacher@berkadia.com (617) 531-8911 30-60 days 60-90 days Minimal Minimal (unless repairs are significant) Existing only Any Remaining term Up to 12 years past remaining term, but not to exceed original mortgage term. Existing Mortgage Balance Original mortgage amount Loan Modification 223(a)(7) $5,000 good faith deposit (refundable at close) ~$7,500 for processing costs and PCNA report. 0.5% ratelock deposit (refundable at close) 1% refundable ratelock deposit; 0.15% of loan amount due at HUD submission.