Requirements

• The general contractor must pay Davis-Bacon wage rates (required by the Department of Labor)

• After construction is completed, both the general contractor and owner must submit a cost certification

• In addition to submitting the required general contractor information, the general contractor must also provide either:

  • a 100% performance and payment bond

  • or a 15-20% cash escrow

  • or a FHA-accepted letter of credit

• The general contractor must also have a liquid net worth of at least 5% of the project’s construction contract and additional uncompleted construction work

Fees

• $25,000 application fee. Covers lender’s due diligence and third-party reports:

  • Appraisal

  • Phase 1 environmental

  • Construction cost review

  • Market study

  • Plans and specs review

• 0.50% FHA inspection fee (paid from mortgage proceeds)

• 0.30% FHA exam fee (paid in two payments - 0.15% at pre-application, 0.15% at application)

• Financing and placement fees: usually capped at 3.50% of the loan amount. Paid from mortgage proceeds at closing

• Good-faith deposit (commitment and rate lock): between 0.50% and 1% of loan amount. Paid at commitment, refunded at closing

• Standard borrower closing costs such as lender's legal, title, and others

Source: https://www.hud.loans/fha-221d4

TO LEARN MORE ABOUT HUD 221(D)(4) LOAN OPTIONS, FILL OUT THE FORM BELOW AND A HUD LOAN EXPERT WILL GET IN TOUCH.

In this article:
1. HUD 221(d)(4) Developer Requirements & Fees
2. Requirements
3. Fees
4. Get Financing